This second wave correction is either over already or it may have one final last push down. We may use confirmation / invalidation points to work with the two hourly wave counts today.
Summary: The trend at minute, minor and intermediate degree remains up. A third wave up would be confirmed as underway if we see a new high above 1,244.53, and the target for the third wave to end is at 1,264. Alternatively, this small second wave correction would be confirmed as incomplete if we see a new low below 1,230.92. The target for it to end is either just below 1,225.15 or maybe 1,220.
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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 a little short of the upper maroon trend line (most likely) or 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 and pulled it down to sit right on the high of primary wave 4. Upwards movement for the last two candlesticks is extremely close to this trend line, and this is where a small correction began.
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 14 trading days the highest volume is in two 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 zigzag upwards of minute wave v, within minuette wave (c) its second wave correction may not move beyond the start of its first wave below 1,204.65.
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.
Main Hourly Wave Count
At this stage I would judge this main and the alternate hourly wave counts to have an even probability.
Subminuette wave ii may be an incomplete regular flat correction. Within it micro wave A subdivides nicely as a double zigzag, and micro wave B is a 101% correction of micro wave A. Regular flats most commonly have C waves which end slightly below the end of their A waves. Micro wave C may end slightly below 1,225.15 to avoid a truncation and a very rare running flat. It may move slightly lower to close to 1,220 to reach down to the 0.382 Fibonacci ratio. *edit: this is the 0.618 Fibonacci ratio, not 0.382
If this second wave correction is
shallowdeep then the third wave up to follow it may only reach equality in length with the first wave at about $40 in length. The following fourth wave correction should be deepshallow, and the final fifth wave up may be shorter than the first and third waves.
The alternate wave count below would be invalidated with a new low below 1,230.92 which would provide confirmation for this wave count.
Subminuette wave ii may not move beyond the start of subminuette wave i below 1,204.65.
Alternate Hourly Wave Count
Although I have labelled these hourly wave counts “main” and “alternate” maybe I should have labelled them “first” and “second” today.
It is entirely possible that subminuette wave ii is over as a quick shallow double zigzag. This is a low degree second wave correction within minette wave (c), and may not last very long. It shows on the daily chart as one small red candlestick so far, and that gives the wave count at the daily chart level the “right look”.
If subminuette wave ii is over then at 1,264 subminuette wave iii would reach equality in length with subminuette wave i. Subminuette wave iii should show a clear strong increase in upwards momentum beyond that seen for subminuette wave i. It may only subdivide as a simple impulse.
If subminuette wave iii has begun then we need to see a clear five up on the hourly chart in order to have confidence in this wave count. So far there is only a 1-2-3-4, probably at submicro wave degree. Submicro wave (4) may not move into submicro wave (1) price territory below 1,230.92. A new low below this point confirms that the lasts upwards wave to the last high at 1,244.53 is over, and was a three wave structure.
This analysis is published about 2:34 p.m. EST.