Yesterday’s analysis expected a little upwards movement to be followed by downwards movement to new lows, and a red candlestick for Wednesday’s session. This is not what happened as price has moved sideways.

Overall this movement fits into the mid term picture of expecting a minute degree B wave is unfolding.

Summary: I am expecting this current sideways movement to end shortly. I am expecting one or two more days of more downwards movement to a target at 1,211.60.

Click on the charts below to enlarge.

Gold is still within a large fourth wave correction at primary wave degree which is incomplete. To see a full explanation of my reasoning for expecting that primary wave 4 is not over and is continuing see this.

Movement above 1,277.97 would provide confirmation that primary wave 4 is not over. At that stage upwards movement could not be a fourth wave correction within primary wave 5 because it would be in its first wave price territory, and the downwards movement labeled intermediate wave (X) would be confirmed as a completed three wave structure.

Primary wave 2 was a rare running flat correction, and was a deep 68% correction of primary wave 1. In order to show alternation in structure primary wave 4 may be a zigzag, double zigzag, combination, triangle or even an expanded flat. We can rule out a zigzag because the first wave subdivides as a three. This still leaves several structural possibilities.

Primary wave 4 is most likely to be a combination or triangle in order to show structural alternation with the running flat of primary wave 2.

The downwards wave labeled intermediate wave (X) is 99% the length of the upwards wave labeled intermediate wave (W). Primary wave 4 is unlikely to be a flat correction because if it were it would be a regular flat. These have similar behaviour and a similar look to running flats, and so there would be little structural alternation between primary waves 2 and 4.

Primary wave 4 is most likely to be a combination rather than a double zigzag because of the depth of intermediate wave (X). Double combinations take up time and move price sideways, and their X waves can be very deep. Double zigzags are different because their purpose is to deepen a correction when the first zigzag does not move price deep enough, so their X waves are not normally very deep. Thus intermediate wave (Y) is most likely to be a flat correction, and less likely a triangle and least likely a zigzag. It is most likely to end about the same level as intermediate wave (W) at 1,434 so that the whole structure moves sideways. It may last about 43 to 89 days, depending upon what structure it takes.

If intermediate wave (Y) is a flat correction then within it minor wave B must retrace a minimum of 90% the length of minor wave A, and it may make a new low below 1,180.84.

If intermediate wave (Y) is a flat correction then within it minor wave A must subdivide as a three wave structure. At this stage it looks like minor wave A may be unfolding as a zigzag because minute wave a within it looks like it is unfolding as a leading diagonal which is a five wave structure.

Primary wave 4 may not move into primary wave 1 price territory. This wave count is invalidated with movement above 1,532.90.

Main Hourly Wave Count.

Sideways movement is much longer in duration to the movement labeled subminuette wave b. This sideways movement is extremely unlikely to be a fourth wave correction within a downwards impulse because it would be grossly out of proportion to its counterpart second wave.

There are thirteen possible corrective structures for this B wave. As it unfolds the wave count will change. I am changing it today from a simple zigzag to a possible double zigzag. The first zigzag downwards of this double is complete, labeled minuette wave (w). The double is joined by a corrective structure in the opposite direction, labeled minuette wave (x).

Minuette wave (x) so far looks like it may be completing as a regular contracting triangle. Within this possible triangle only the final wave of subminuette wave e upwards needs to complete. It would probably fall short of the a-c trend line. The triangle will remain valid if subminuette wave e does not move beyond the end of submineutte wave c at 1,243.68.

If the triangle is invalidated then it would be possible that minuette wave (x) is a combination. The purpose of both combinations and triangles is to take up time and move price sideways, and so for both of these possibilities I would not expect much more upwards movement. If the triangle is invalidated with movement above 1,243.68 then I would expect a combination to end about 1,244.32 or slightly above this point.

When minuette wave (x) is complete then I would expect to see a second zigzag structure unfold downwards for minuette wave (y). I would expect minuette wave (y) to most likely end about the 0.618 Fibonacci ratio of minute wave a at 1,211.60.

Minute wave b may not move beyond the start of minute wave a. This wave count is invalidated with movement below 1,180.84.

Alternate Hourly Wave Count.

This alternate wave count is the same as yesterday. It still has a low probability.

The subdivisions are exactly the same as the main wave count. The first wave down is a zigzag and this may be minuette wave (a) within a flat correction for minute wave (b).

Within the flat correction minuette wave (b) must retrace a minimum of 90% the length of minuette wave (a) at 1,260.33. Within the flat correction minuette wave (b) may move beyond the start of minuette wave (a) above 1,263.06. The most common type of flat is an expanded flat which would require minuette wave (b) to move up to 1,264.43 or above.

There is no upper invalidation point for this wave count because there is no maximum allowable length for a B wave within a flat correction.

Within subminuette wave c micro wave 2 may not move beyond the start of micro wave 1. This wave count is invalidated in the short term with movement below 1,238.18.

Alternate Daily Wave Count – Triangle.

It is also possible that primary wave 4 may continue as a regular contracting (or barrier) triangle.

The expected direction of this next upwards wave is the same, but for this alternate intermediate wave (C) of the triangle may not move beyond the end of intermediate wave (A). The triangle is invalidated with movement above 1,438.83.

Intermediate wave (C) must unfold as either a single or double zigzag. Within it no second wave correction, nor wave B of the zigzag, may move beyond the start of the first wave or A wave. This wave count is invalidated with movement below 1,180.84.

The final intermediate wave (E) upwards may not move above the end of intermediate wave (C) for both a contracting and barrier triangle. E waves most commonly end short of the A-C trend line.

All five subwaves of a triangle must divide into corrective structures. If this next upwards movement subdivides as a zigzag which does not make a new high above 1,438.83 then this alternate would be correct.

Triangles take up time and move price sideways. If primary wave 4 unfolds as a triangle then I would expect it to last months rather than weeks.