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The alternate Elliott wave count was confirmed with a new low below 1,190.96. The main Elliott wave count was invalidated, and will now be discarded.

Summary: Downwards movement continues to find support at the pink ii-iv trend line. An upwards wave should begin from here. The target for upwards movement to end is at least 1,266.33.

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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. Minor wave C is extremely likely to move at least slightly above the end of minor wave A at 1,255.40 to avoid a truncation and a very rare running flat correction. It may end when price touches the upper edge of the maroon channel, copied over here from the weekly chart. To see how to draw this channel click here.

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

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 ending its twelfth week. If it continues for one more week it may have an even duration with intermediate wave (1). This may be possible, or it may need a little longer.

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

Minor wave C may be either an impulse or an ending diagonal. At this stage an impulse looks very unlikely because there is too much overlapping. An ending diagonal looks more likely, and it may be now within the final fifth wave.

Within an ending diagonal all the sub waves must subdivide as zigzags. Here I am seeing minute wave iv as a double zigzag, allowing for an interpretation of the rules outlined in Frost and Prechter which state that double and triple zigzags may take the place of single zigzags.

This diagonal would be expanding: minute wave iii is longer than minute wave i, and minute wave iv is longer than minute wave ii. The trend lines are slightly diverging. Minute wave v should be longer than equality with minute wave iii which would be achieved at 1,266.33. This would also see minor wave C end above the end of minor wave A at 1,255.40 avoiding a truncation and a very rare running flat.

Within the final zigzag of minute wave v no second wave correction nor B wave may move beyond its start below 1,170.83. Downwards movement should find strong support at the lower ii-iv trend line of the diagonal, because diagonals always fit well within their trend lines.

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. If it is seen as a complete 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

The final wave up of this ending diagonal for minute wave v must subdivide as a zigzag, subdividing 5-3-5. Within it minuette wave (a) may be complete, or this may be moved down one degree and may only be subminuette wave i within minuette wave (a). At this stage it makes no difference to the invalidation point or expected direction. I may move the degree of labelling or publish a different degree as an alternate if this idea does begin to diverge. For now I will keep the charts to the minimum.

Minuette wave (b) now subdivides as a complete zigzag. Within it subminuette wave c is just 0.83 longer than 1.618 the length of subminuette wave a. On the five minute chart the structure is either complete here, or may end with on final very small new low to complete the final fifth wave down within micro wave 5. If it does that it should find strong support at the pink ii-iv trend line, with only a small intra-hour overshoot acceptable (like that seen previously for the end of subminuette wave ii).

If minuette wave (b) ends here and minuette wave (c) begins here, then if minuette wave (c) were to only be 1.618 the length of minuette wave (a) minor wave C would end at 1,246. It would be truncated and the fifth wave of the diagonal would be shorter than the third. This target does not work. If minuette wave (c) were to reach 2.618 the length of minuette wave (a) minor wave C would end at 1,286 which would probably overshoot the maroon channel on the daily and weekly charts. This is very unlikely.

Minuette waves (a) and (c) may not exhibit a Fibonacci ratio to each other, which is somewhat common. The target may be best calculated at subminuette wave degree, or in this instance the maroon channel on the daily chart may be a better measure of where upwards movement may end than a price target.

Minuette wave (b) may not move beyond the start of minuette wave (a) below 1,170.83.

This analysis is published about 3:42 p.m. EST.