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Downwards movement was expected, but this is not what happened. However, upwards movement was allowed for and has not breached the invalidation point on the hourly Elliott wave chart.

Summary: This upwards movement has meant the target is recalculated. It is now at 1,156. It might be met in one day if this correction exhibits a Fibonacci duration of eight days, but it may now possibly take a little longer.

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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 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) at 1,283.27.

Intermediate wave (1) lasted a Fibonacci 13 weeks. If intermediate wave (2) exhibits a Fibonacci duration it may be 13 weeks to be even with intermediate wave (1). Intermediate wave (2) is now in its tenth week.

So far within minor wave C the highest volume is on two up days. This supports the idea that at this stage the trend remains up.

See the most recent Historic Analysis to see the long term channel about this whole downwards movement. The channel does not copy over to the daily chart when I put the daily chart on an arithmetic scale, so this channel must be drawn on a weekly chart on a semi log scale. The upper edge of that channel may be where intermediate wave (2) finally ends. I would not expect the upper edge of this channel to be breached.

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.

Within minor wave C minute wave i subdivides perfectly as a leading contracting diagonal. When leading diagonals unfold in first wave positions they are normally followed by very deep second wave corrections. There is a nice example here on the daily chart: at the top left of the chart minor wave 1 was a leading contracting diagonal and it was followed by a deep 65% zigzag for minor wave 2. I will expect minute wave ii to be deep, at least to the 0.618 Fibonacci ratio at 1,172. When it is over then a third wave up should begin.

I do not think that minor wave C is complete at the high of 1,238 as an ending contracting diagonal for three reasons:

1. Intermediate wave (2) would be a very rare running flat correction.

2. Minor wave C would be substantially truncated, by $17.

3. This structure does not subdivide well as an ending diagonal because the third and fifth waves do not fit well as zigzags. Within an ending diagonal all the sub waves must be zigzags.

Minute wave ii may not move beyond the start of minute wave i below 1,138.19.

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 well 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.

I do not want to publish a wave count which sees primary wave 5 complete at the low of 1,131. This downwards movement does not fit well at all as a complete five wave impulse. There would be inadequate alternation between the single zigzag of the second wave and the double zigzag of the fourth wave correction, and there would be no Fibonacci ratios between the first, third and fifth waves within it.

GOLD Elliott Wave Chart 2014

Of all the waves within Elliott wave, it is B waves which exhibit the greatest variety in form and structure. Sometimes B waves can be quick and sharp zigzags, and they can even fool us into thinking they are impulses with a strong slope. More often B waves are very complicated sideways movements, and the B waves within B waves are even worse.

It is for this reason that I left the invalidation point up at 1,223.57, to allow room for subminuette wave b to continue sideways / higher. This is what it has done.

Because the structure of subminuette wave a on the five minute chart looks very clear as a five wave impulse I am confident that while this larger correction for minute wave ii is incomplete we should not see movement above the start of subminuette wave a at 1,223.57. When A subdivides as a five then B may not move beyond its start.

Because it has now taken more time, subminuette wave b is now more likely to be over today as a deep expanded flat correction.

With subminuette wave b now a deeper correction the target is recalculated. At 1,156 subminuette wave c would reach 1.618 the length of subminuette wave a. Were subminuette wave c to now only reach equality in length with subminuette wave a minute wave ii would end short of the 0.618 Fibonacci ratio. But this is a second wave correction following a first wave leading diagonal so it is very likely to be deeper than that.

Minute wave ii is very likely to reach at least to the 0.618 Fibonacci ratio of minute wave i at 1,172, and most likely to be below that.

This analysis is published about 2:34 p.m. EST.