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Both hourly wave counts were invalidated: first the alternate with upwards movement, and following that the main with downwards movement.

The structure of the last upwards wave on the hourly chart is now clear and complete. The current downwards wave is incomplete.

Summary: Both wave counts remain valid and both expect more downwards movement. If price breaks below 1,231.69 then we should see another day of downwards movement towards a target at 1,198.

Click on the charts below to enlarge.

Gold Elliott Wave Chart Daily 2013

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 has provided confirmation that primary wave 4 is not over. This upwards movement cannot be a fourth wave correction within primary wave 5 as it has now moved into what would be its counterpart first wave price territory. The wave down from the high labeled intermediate wave (W) to the low labeled intermediate wave (X) is now confirmed as a three wave structure. Primary wave 5 cannot subdivide as a three, it can only subdivide as a five.

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 completed as a leading diagonal which is a five wave structure. If minute wave b within this zigzag is over then at 1,314 minute wave c would reach equality in length with minute wave a.

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

Hourly Main Wave Count.

GOLD Elliott Wave Chart Hourly 2013

This minute degree b wave is proving to be typically difficult to analyse. Of all the waves, B waves are often the most difficult and complicated structures.

It is most likely that minute wave b is incomplete and is continuing further. Upwards movement to complete minuette wave (b) within it ended as a double zigzag, and the second zigzag provided the surprise upwards movement which began this session. Within minuette wave (b) subminuette wave y looks best as a zigzag on the hourly chart. On the five minute chart it is ambiguous.

Within minute wave b minuette wave (b) is now a 151% correction of minuette wave (a). This makes the second lower target calculation for minuette wave (c) more likely. At 1,229 minuette wave (c) would reach 1.618 the length of minuette wave (a). At 1,198 minuette wave (c) would reach 2.618 the length of minuette wave (a). The higher minuette wave (b) goes, the lower minuette wave (c) is likely to be.

Within minuette wave (c) the structure is incomplete and it needs further down to go. This may last another one or possibly two days.

Within minuette wave (c) subminuette waves i and ii are complete. Subminuette wave iii is incomplete. When it is complete then the following upwards correction for subminuette wave iv may not move into subminuette wave i price territory. This wave count is invalidated in the short term with movement above 1,266.37.

I have drawn an acceleration channel about the start of minuette wave (c). The channel is drawn with the first trend line from the start of subminuette wave i to the end of subminuette wave ii, then a parallel copy is placed upon the end of subminuette wave i. Subminuette wave iii should breach this channel, and it has, confirming it is a third wave. Along the way down any upwards corrections should not move above the upper edge of this channel.

When subminuette wave iii is complete then a channel may be drawn about minuette wave (c) using Elliott’s technique.

If downwards movement moves below 1,231.69 then I would expect it to be most likely to continue to about 1,198.

Hourly Alternate Wave Count.

GOLD Elliott Wave Chart Hourly 2013

It is still possible that minute wave b was over and minute wave c upwards has begun. But this wave count has a few problems today which reduce its probability.

Minute wave b lasted only three days, which is possible. But minuette wave (ii) one degree lower has so far lasted two days and is incomplete. It is unlikely that a lower degree correction is longer in duration than minute wave b.

Within minuette wave (ii) the structure fits as an expanded flat. Within the expanded flat subminuette wave b is a 232% correction of subminuette wave a. When B waves within flats exceed 200% the length of the A wave the probability that a flat is unfolding is extremely low. This is the biggest problem today with this wave count, and it is significant.

I would only use this wave count if price does not breach 1,231.69, turns around and moves above the acceleration channel drawn about subminuette wave c which would indicate a trend change back to the upside.

Alternate Daily Wave Count – Triangle.

Gold Elliott Wave Chart Daily Alternate 2013

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.