Upwards movement was expected from the main hourly wave count which was strongly favoured. The downwards correction which followed it is finding support about the lower edge of the trend channel.
Summary: I expect a little more downwards movement to complete a second wave correction which should find support at the lower edge of the trend channel. This may be over within a few hours and should be followed by another upwards wave to new highs with an increase in upwards momentum. I expect this third wave up to be 43.90 in length.
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 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, 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.
Primary wave 4 may not move into primary wave 1 price territory. This wave count is invalidated with movement above 1,532.90.
Draw a channel about the zigzag of minor wave A: draw the first trend line from the start of minute wave a to the end of minute wave b, then place a parallel copy upon the end of minute wave a.
Movement above 1,266.42 invalidated the alternate hourly wave count and confirmed this main wave count. Minute wave b is over as a running contracting triangle. Minute wave c upwards should last about two weeks and must subdivide as a five wave structure.
At 1,295 minute wave c would reach equality in length with the widest part of the triangle. If price keeps rising through this first target, or when it gets there the structure of minute wave c is incomplete then I will use the second target. At 1,330 minute wave c would reach equality in length with minute wave a. I favour the higher second target at this stage.
Minute wave c is likely to end about the lower edge of the parallel channel drawn about the zigzag of minor wave A and copied over here from the daily chart.
Within minute wave c the first wave of minuette wave (i) is unlikely to be over yet, and this may be just only subminuette wave i within minuette wave (i). Because this is most likely only subminuette wave degree I would not expect the following second wave correction for subminuette wave ii to show on the daily chart, which means it is likely to end within a few hours and not create a red candlestick.
Subminuette wave ii is incomplete, the downwards wave labeled micro wave A subdivides as a five wave structure on the five minute chart so it cannot be over there. I would expect it to find strong support about the lower edge of the parallel channel. When it is done the next wave upwards is likely to be 1.618 the length of subminuette wave i at 43.90 long. Subminuette wave iii should show some increase in upwards momentum.
Subminuette wave ii may not move beyond the start of subminuette wave i. This wave count is invalidated with movement below 1,247.40.
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.