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Downwards movement fits the main Elliott wave count, but is not enough to provide clarity. I still have two daily wave counts.

Summary: For Monday I expect to see a third wave begin. I expect it will most likely be upwards, and I would have more confidence in this direction with a new high above 1,324.59. The target up is 1,346. However, a lower probability (still possible) is we may see a third wave down begin. A new low below 1,298.93 would increase this probability.

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Main Wave Count.

Gold Elliott Wave Chart Daily 2014

Primary wave 4 is an almost complete regular contracting triangle, now in its 55th week. If it ends within the next six days it will be close enough to a Fibonacci 55 weeks to exhibit a Fibonacci duration.

The final zigzag of intermediate wave (E) may be just a few days away from completion. Within it minor wave B can be seen as a complete expanded flat. There is no Fibonacci ratio between minute waves a and c.

At 1,350 minor wave C would reach 0.618 the length of minor wave A. Minor wave C is extremely likely to at least make a new high above the end of minor wave A at 1,333.61 to avoid a truncation.

When minor wave C is a complete five wave structure then I will expect a primary degree trend change. Eventually a clear breach of the lower (B)-(D) trend line of this triangle will provide confirmation that primary wave 4 has ended and primary wave 5 has then begun.

GOLD Elliott Wave Chart Hourly 2014

This hourly wave count has the better fit of the two charts, and I would judge it to have about an 80% probability. It has the “right look”. Also, downwards movement for minuette wave (ii) fits very nicely as a zigzag on the five minute chart. It is more difficult to see this movement as a five wave structure. This adds a little more confidence to this main wave count at the end of the week.

Within minor wave C, minute wave iii has begun. Within minute wave iii, minuette waves (i) and (ii) are most likely complete.

I have drawn a best fit channel about this upwards movement. Minuette wave (ii) so far remains within this channel and should not breach the lower pink trend line.

If this main wave count is correct then on Monday we should begin to see an increase in upwards momentum as the middle of a third wave unfolds.

At 1,346 minuette wave (iii) would reach 1.618 the length of minuette wave (i). After that I would expect one or both of minuette wave (iv) and minute wave iv to show on the daily chart as red candlesticks or doji’s, because minuette wave (ii) is so clear on the daily chart. When minor wave C is complete it should look like a five wave structure on the daily and hourly charts.

The target at 1,350 may be just a few days away.

Minuette wave (ii) may not move beyond the start of minuette wave (i) below 1,298.93.

Price movement above 1,324.73 would invalidate my labeling on the second hourly chart and alternate hourly chart below. This would provide some confidence in this main wave count.

Only movement above 1,345.22 would fully eliminate the alternates below.

I leave it up to your own risk appetite as to which price point you require for confidence, and how much uncertainty you can manage.

GOLD Elliott Wave Chart Hourly 2014

It is still possible that this upwards movement is a fourth wave correction, but it looks unlikely. I would judge this wave count now to have a very low probability, maybe as low as 10 – 20%. Minuette waves (ii) and (iv) are too disproportionate, and minuette wave (iv) too strongly breaches a channel. This channel here looks wrong.

Only if price breaks below 1,298.93 would I consider this wave count seriously. At that point I would expect downwards movement to end about 1,280 where minute wave c would reach 2.618 the length of minute wave a.

Within minuette wave (v) no second wave correction may move beyond its start above 1,324.73.

The only reason why I publish this wave count today is it does have a reasonable look on the daily chart and minuette wave (iv) could be exhibiting alternation with minuette wave (ii) by being very deep.

Alternate Wave Count.

Gold Elliott Wave Chart Daily Alternate 2014

It is possible that primary wave 4 is complete in a total 54 weeks, just one short of a Fibonacci 55 and just one week longer than primary wave 2 which was 53 weeks in duration.

The subdivisions for this alternate do not have as neat a fit as the main wave count:

– The triangle for minor wave B has an overshoot of the b-d trend line within minute wave c which looks significant on the hourly chart.

– At the end of minor wave A minute wave v does not subdivide well as a five wave structure on the hourly chart. This movement fits better as a three.

– Minor wave C subdivides here as a five wave structure, but it has a much better fit as a zigzag (which is how the main wave count sees it).

For the three reasons above this alternate has a lower probability. I would judge it at this stage to have a 20 – 30% probability.

The differentiating point is the lower (B)-(D) trend line here on the daily chart. If this trend line is breached by a full daily candlestick below it and not touching it then I would discard the main wave count and this alternate would be my only wave count.

At 956.97 primary wave 5 would reach equality in length with primary wave 1. Primary wave 1 was a remarkably brief three weeks in duration. Primary wave 5 could also be as brief, but it is more likely to show a little alternation and be longer lasting.

Gold Elliott Wave Chart Hourly Alternate 2014

Minute wave ii may be complete, ending very close to the 0.618 Fibonacci ratio of minute wave i.

I have drawn a base channel about minute waves i and ii. Upwards corrections along the way down should find resistance at the upper pink trend line. If this trend line is clearly breached that may be earliest indication that this wave count is wrong. Minuette wave (ii) may not move beyond the start of minuette wave (i).

At 1,223 minute wave iii would reach 1.618 the length of minute wave i.

While the main hourly wave count expects to see a third wave up begin on Monday, this alternate expects to see a third wave down on Monday.

This analysis is published about 11:55 p.m. EST.