Last analysis expected a little more upwards movement before a second wave correction arrived. This is exactly what happened.
The wave count remains the same. I have two hourly charts for you today.
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 or regular flat. We can rule out a zigzag because the first wave subdivides as a three. This still leaves several structural possibilities.
The downwards wave labeled intermediate wave (X) is now 99% the length of the upwards wave labeled intermediate wave (W). 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.
Primary wave 4 is less likely 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.
Draw a parallel channel about minor wave C downwards (pink channel) with the first trend line from the highs labeled minute waves ii to iv, then place a parallel copy upon the low labeled minute wave iii. When this channel is clearly breached by upwards movement then we shall have trend channel confirmation that minor wave C is complete and the next wave is underway.
When the channel about intermediate wave (X) is finally breached by upwards movement then I would consider that final confirmation that intermediate wave (Y) is underway.
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. 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.
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.
Movement above 1,220.65 has provided first confirmation of a trend change at intermediate wave degree. Further upwards movement above the pink channel should come within the next 24 hours. When we have a full daily candlestick above this channel and not touching the trend line then I would have further confidence in this trend change.
The first trading day of the new year began with upwards movement which completed a first wave. This was followed by the beginning of a second wave correction.
Because upwards movement labeled subminuette wave b subdivides as a double zigzag on the five minute chart, I do not think this is the start of a third wave. It is more likely to be wave B within the expected second wave correction. Movement below 1,213.56 would confirm this main hourly wave count and invalidate the alternate below. At that stage I would expect a little more downwards movement most likely to the target.
I would not expect this second wave correction to show up on the daily chart as a red candlestick, and it should be over within a few hours.
At 1,204 subminuette wave c would reach 1.618 the length of subminuette wave a.
Minuette wave (ii) may not move beyond the start of minuette wave (i). This wave count is invalidated with movement below 1,180.84.
Alternate Hourly Wave Count.
Alternatively, it is possible that minuette wave (ii) is over and the upwards movement from 1,213.56 is the start of minuette wave (iii) as a series of overlapping first and second waves. This has a lower probability than the main wave count above, and should only be used if price moves above 1,231.04 before making a new low.
At 1,263 minuette wave (iii) would reach equality in length with minuette wave (i).
Within minuette wave (iii) no second wave correction may move beyond the start of its first wave. This wave count is invalidated with movement below 1,213.56.
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). Intermediate wave (C) must subdivide as a zigzag or double zigzag. The triangle is invalidated with movement above 1,438.83.
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.
Could you please explain overlapping 1st and 2nd waves? How does one recognize the structure?
This is a series of 1-2, 1-2 etc which is how an extended third wave necessarily begins.
We recongnise the structure by not seeing a clear third wave in the middle; the third wave in the middle must adhere to the core EW rule that the fourth wave must not overlap into first wave price territory. If there is overlap then it cannot be a fourth wave.
HI Lara, Currently the price action already invalidate the main hourly wave count.What will be the price that I can wait it to retace before buying it today?
I cannot legally offer trading advice which is this specific.
At this stage I expect more upwards movement, with an increase in upwards momentum. Price should not move below the invalidation point.
We may be at the very early stages (in the first three days) of a multi week / month advance.