Select Page

The alternate Elliott hourly wave count from yesterday’s update was confirmed with a new high above 1,241.61.

Summary: The trend is up. I expect it to end above 1,262.94. Use the trend channel on the hourly chart to indicate when a larger correction has arrived, because I expect two on the way up to the target. It is reasonably likely that they may show up on the daily chart as one or more red candlesticks or doji.

Click on charts to enlarge.

Gold Elliott Wave Chart Daily 2015

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. I have created a parallel copy of this upper maroon trend line today and pulled it down to sit right on the high of primary wave 4. Upwards movement for today’s candlestick is extremely close to this trend line, which may provide enough resistance to initiate a second wave correction.

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

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. Even for the last 13 trading days the highest volume is in five up days.

Minor wave C may be only subdivide as an impulse or an ending diagonal. With all the overlapping within it, an ending diagonal looks more likely, and it is now within the final fifth wave up. The diagonal is expanding and the trend lines clearly diverge. Expect the final fifth wave of expanding diagonals to fall short of the i-iii trend line. Minute wave v should be longer than equality with minute wave iii which would be achieved at 1,262.94. 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 an ending diagonal all the sub waves must subdivide as zigzags. The fourth wave should overlap first wave price territory. The rule for the end of a fourth wave of a diagonal is it may not move beyond the end of the second wave.

Within the final upwards zigzag of minute wave v if minuette wave (b) were to continue further it may not move beyond the start of minuette wave (a) below 1,167.44.

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 2015

Minuette wave (b) must be complete. This upwards movement is extremely unlikely to be a continuation of that correction. Minuette wave (c) looks like it has begun.

At 1,260 minuette wave (c) would reach equality in length with minuette wave (a). I expect upwards movement to end very close to 1,262.94, at or slightly above this point, so that minuette waves (a) and (c) are close to equality.

Minuette wave (c) must subdivide as a five wave structure. The only two possibilities are an impulse (most likely) or an ending diagonal (less likely). Within minuette wave (c) there will be two larger corrections along the way up: one for subminuette wave ii and the other later on for subminuette wave iv.

So far to the upside within minuette wave (c) I can see a completed five wave impulse. It is possible and very likely that subminuette wave i is over. Because this subdivides so well as a five wave impulse this indicates that minuette wave (c) is unfolding as a simple impulse rather than an ending diagonal, because within an ending diagonal all the sub waves must be zigzags.

Ratios within subminuette wave i are: micro wave 3 is 3.44 longer than 2.618 the length of micro wave 1, and micro wave 5 is 1.38 short of equality in length with micro wave 1. Because this labelling has such good Fibonacci ratios I am reasonably confident it is correct.

I have drawn a parallel best fit channel about submineutte wave i. It is important that this channel is used to confirm that subminuette wave i is over and subminuette wave ii has begun. Confirmation will come with a full hourly candlestick below the lower edge of the channel and not touching that trend line.

I will expect to see some alternation between minuette waves (a) and (c). Minuette wave (a) lasted 2-3 days and was a straight up movement, and did not show its subdivisions on the daily chart. Minuette wave (c) may look different with its subdivisions (subminuette waves ii and iv within it) showing up on the daily chart as one or more red candlesticks or doji. It does not have to do this, but is just reasonably likely that it will do this.

When the channel here is breached then I would have more confidence that subminuette wave ii is underway. It may end at the 0.382 or 0.618 Fibonacci ratio of subminuette wave i, favouring the 0.618 ratio as this is a second wave correction.

Subminuette wave ii may not move beyond the start of subminuette wave i below 1,204.65.

This analysis is published about 2:16 p.m. EST.