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More sideways movement fits the new main Elliott wave count very well, with some adjustment. The larger Elliott wave structure remains the same, and the target changes by $2.

Summary: When sideways movement is complete I expect a short sharp upwards thrust to about 1,220. Thereafter, I expect some downwards movement for one to three days for a fourth wave correction. Overall the trend at minute and minor degrees is up. I see a rising wedge, a leading contracting diagonal, unfolding upwards which is incomplete.

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Gold Elliott Wave Chart Daily 2014

Primary wave 4 is complete and primary wave 5 is unfolding. Primary wave 5 may only subdivide as an impulse or an ending diagonal. So far it looks most likely to be an impulse.

Within primary wave 5 intermediate wave (1) fits perfectly as an impulse. There is perfect alternation within intermediate wave (1): minor wave 2 is a deep zigzag lasting a Fibonacci five days and minor wave 4 is a shallow triangle lasting a Fibonacci eight days, 1.618 the duration of minor wave 2. Minor wave 3 is 9.65 longer than 1.618 the length of minor wave 1, and minor wave 5 is just 0.51 short of 0.618 the length of minor wave 1. I am confident this movement is one complete impulse.

Intermediate wave (2) is an incomplete expanded flat correction. Within it minor wave A is a double zigzag. The downwards wave labelled minor wave B has a corrective count of seven and subdivides perfectly as a zigzag. Minor wave B is a 172% correction of minor wave A. This is longer than the maximum common length for a B wave within a flat correction at 138%, but within the allowable range of less than twice the length of minor wave A. Minor wave C may not exhibit a Fibonacci ratio to minor wave A, and I think the target for it to end would best be calculated at minute degree. At this stage I would expect intermediate wave (2) to end close to the 0.618 Fibonacci ratio of intermediate wave (1) just below 1,281.

Intermediate wave (1) lasted a Fibonacci 13 weeks. So far intermediate wave (2) has just begun its seventh week. I will expect it may continue for another two weeks at least to total a Fibonacci eight, and be 0.618 the duration of intermediate wave (1). Alternatively, intermediate wave (2) may last a total Fibonacci 13 weeks equalling the duration of intermediate wave (1).

The target for primary wave 5 at this stage remains the same. At 956.97 it would reach equality in length with primary wave 1. However, if this target is wrong it may be too low. When intermediate waves (1) through to (4) within it are complete I will calculate the target at intermediate degree and if it changes it may move upwards. This is because waves following triangles tend to be more brief and weak than otherwise expected. A perfect example is on this chart: minor wave 5 to end intermediate wave (1) was particularly short and brief after the triangle of minor wave 4.

Intermediate wave (2) may not move beyond the start of intermediate wave (1) above 1,345.22. I have confidence this price point will not be passed because the structure of primary wave 5 is incomplete because downwards movement from the end of the triangle of primary wave 4 does not fit as either a complete impulse nor an ending diagonal.

To see a prior example of an expanded flat correction for Gold on the daily chart, and an explanation of this structure, go here.

*Note: I am aware (thank you to members) that other Elliott wave analysts are calling now for the end of primary wave 5 at the low at 1,131. I am struggling to see how this downwards movement fits as a five wave impulse: I would label the second wave within it (labelled minor wave 2) intermediate wave (1), and the fourth wave intermediate wave (4) (labelled as a double zigzag for minor wave A). Thus a complete impulse down would have a second wave as a single zigzag and a fourth wave as a double zigzag, which would have inadequate alternation. Finally, the final fifth wave down would be where I have minor wave B within intermediate wave (2). This downwards wave has a cursory count of seven, and I do not think it subdivides as well as an impulse as it does as a zigzag. If any members come across a wave count showing possible subdivisions of a complete primary wave 5 I would be very curious to see it.

GOLD Elliott Wave Chart 2014

I am discarding yesterday’s alternate hourly wave count and presenting only this one to you for two main reasons:

1. Yesterday’s alternate hourly wave count expected to see a strong increase in upwards momentum as the middle of a third wave took off. This is again not what has happened.

Yesterday’s alternate remains technically possible, but there has to come a point where I accept the probability is so low and discard it. It remains an outside possibility that upwards movement could be very strong from here, but I do not think this will happen.

2. It looks very much like a triangle is unfolding at the moment, and is almost complete. A triangle may not be the sole corrective structure in a second wave, so this cannot be the entirety of a second wave correction just before the middle of a third wave.

What is much more likely and fits all subdivisions is that minute wave i is completing as a leading contracting diagonal. Contracting diagonals are more common than expanding diagonals.

Minuette wave (i) is a complete zigzag. Minuette wave (ii) is also a complete zigzag, but it is just 0.40 the length of minuette wave (i) which is shorter than normal for a second (and fourth) wave within a diagonal of between 0.66 to 0.81.

Minuette wave (iii) is an incomplete zigzag. Minuette wave (iii) must move beyond the end of minute wave (i) above 1,197.96. At 1,220 subminuette wave c would reach equality in length with subminuette wave a.

It looks very much like this current sideways movement is completing a long nine wave triangle for subminuette wave b. The overall triangle structure looks right and the triangle wave ends fit the rules for a running contracting triangle perfectly, so I will not be overly concerned with how each triangle sub wave subdivides. Within the triangle micro wave E may not move beyond the end of micro wave C below 1,190.56.

I expect the triangle to come to an end within the next 24 hours (sooner rather than later), and when it is done I expect a short sharp upwards thrust towards the target.

When we know how long minuette wave (iii) is then we can know for sure if the diagonal is contracting or expanding. This will tell us if minuette wave (iv) should be shorter or longer than the length of minuette wave (ii).

Minuette wave (iv) should overlap back into minuette wave (i) price territory, but it may not move beyond the end of minuette wave (ii) below 1,175.18.

Minuette wave (v) upwards is most likely to unfold as a zigzag and must move beyond the end of minuette wave (iii), because the fifth wave of a leading diagonal may not be truncated.

In a continuation of choppy overlapping movement, this wave count expects a short sharp upwards thrust in the short term and to move in an upwards direction mid term.

This analysis is published about 05:43 p.m. EST.