A trend change was expected, but price has made a slight new high. At the daily chart the two wave counts are still the same, but I am changing the labelling of this last upwards movement on the hourly chart to fit better with momentum. I have a new daily alternate wave count for you to consider.
Summary: I am still waiting for a trend change which becomes more likely as divergence on the hourly chart becomes stronger. The trend change for the first two daily wave counts is at intermediate degree, and for the third wave count only at minute degree. Before I have any confidence whatsoever that the trend change has occurred I want to see some confirmation with a breach of the orange channel on the hourly chart, followed by a new low below 1,279.16. I will have full confidence that the trend change has occurred with a clear breach of the green channel on the daily chart. If Friday’s session brings price back below the maroon trend line on the daily chart the main wave count will remain valid. If it does not I will discard the main wave count in favour of the alternates, or at least reduce the main wave count to a very low probability.
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Main Daily Wave Count
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. Although I am still confident this movement is a complete impulse, the alternate wave count is also reasonable (but has a lower probability).
Intermediate wave (2) may not move beyond the start of intermediate wave (1) above 1,345.22. If this invalidation point is passed this main wave count would be invalidated and the alternate daily wave count would be confirmed.
Intermediate wave (2) is now a complete expanded flat correction. Minor wave C is longer than 1.618 the length of minor wave A, and there is no Fibonacci ratio between them. Minor wave C is now a complete expanding ending diagonal.
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.
Draw a “best fit” channel about minute wave v zigzag. When this green trend channel is clearly breached by a full daily candlestick below the lower green trend line and not touching it, then I would have a lot of confidence that there has been a trend change at intermediate wave degree. Only a new low below 1,131.09 would provide full and final price confirmation that downwards movement is intermediate wave (3), but we should be alerted to it before that price point is passed by looking at structure and momentum. Intermediate wave (3) may only subdivide as a five wave impulse, and it should show a clear strong increase in downward momentum.
Draw the maroon trend line on a weekly chart on a semi-log scale, and copy it over to a daily chart also on a semi-log scale (see this analysis for a weekly chart). This trend line is now clearly breached with two full daily candlesticks above it and (just) not touching it. This reduces the probability of this wave count substantially to about even with the alternate. If this maroon trend line is breached on the weekly chart, with one weekly candlestick above it and not touching it, then I would discard this wave count in favour of the alternate. At the end of Friday’s session we may have an answer.
The breach of this trend line should be taken as a strong warning that this wave count may not be correct.
I have adjusted the wave count substantially within minuette wave (c) to fit with momentum, and to see the third wave within it extended, which is the most commonly extended actionary wave within an impulse.
There is no Fibonacci ratio between subminuette waves iii and i (but there wasn’t with my last labelling either). Subminuette wave v is now 2.79 short of 2.618 the length of subminuette wave i.
The orange channel is a best fit channel: draw the first trend line from the highs of subminuette waves i to iii, then place a parallel copy on the low of submicro wave (2) within the middle of the third wave. Micro wave 3, the middle of the third wave, slightly overshoots the upper trend line which is typical. The lower trend line now shows exactly where downwards movement during Thursday’s session found support and this tells us the trend line may be the best indicator of a trend change. Only when this trend channel is breached by at least one full hourly candlestick below it and not touching the lower orange line would I have any confidence whatsoever that the trend change has finally occurred.
A new low below 1,279.16 would now provide early price confirmation of a trend change. This is the start of the final fifth wave up. A new low below its start may not be a second wave correction, and so at that stage the final fifth wave must be over and cannot extend higher.
Thereafter, a breach of the bigger green channel on the daily chart would provide full confidence in a trend change at intermediate degree.
Alternate Daily Wave Count
If price breaks above 1,345.22 this would be my only wave count. At this stage, despite its problems, I judge this wave count to have a about an even probability with the main daily wave count.
Intermediate wave (2) is a rare running flat. This is entirely possible just before a strong third wave, with the downwards pull of a third wave forcing minor wave C to be slightly truncated. However, within intermediate wave (2) minor wave C looks clearly like a three wave structure on the daily chart and this is a considerable problem. If you’re going to label a running flat it is essential that the subdivisions fit perfectly. This is still my main problem with this wave count.
Intermediate wave (2) is a 58% correction of intermediate wave (1), and is a running flat. Intermediate wave (4) is a 52% correction of intermediate wave (3) and is a double zigzag. There is little alternation in depth, but perfect alternation in structure.
Ratios within primary wave 5 are: intermediate wave (3) is just 1.09 longer than 2.618 the length of intermediate wave (1), and intermediate wave (5) has no Fibonacci ratio to either of intermediate waves (1) or (3).
Intermediate wave (5) still looks like a zigzag rather than an impulse, and has a corrective wave count. This also reduces the probability of this wave count.
It is entirely possible that there was a leading expanding diagonal as the first five up within primary wave A. For diagonals the contracting variety is more common than expanding, and ending diagonals are more common than leading. While a leading expanding diagonal is not rare, it is not very common either. This very slightly also reduces the probability of this wave count.
Leading diagonals are almost always followed by very deep second wave corrections, often deeper than the 0.618 Fibonacci ratio of them. This wave count expects a big deep correction downwards. It should subdivide as a clear three on the daily chart, where the main wave count now expects a clear five down.
Intermediate wave (2) may not move beyond the start of intermediate wave (1) below 1,131.09.
Second Alternate Daily Wave Count
I can just see that this upwards movement could possibly be the middle of a third wave just passed. This wave count fits with momentum at the daily chart level.
If there has been a cycle degree trend change at 1,131 then the new upwards trend must begin with a five up. The first five up may be either a leading diagonal or an impulse, and an impulse is more common.
For this wave count minute wave ii is problematic: its subdivisions are not as good a fit as the first two wave counts, and it is much longer in duration that minor wave 2 one degree higher. Minute wave ii lasts 22 days where minor wave 2 lasts 9 days, which gives the wave count an odd look. But occasionally Gold does this, so it is viable.
If the middle of a third wave has passed then a small fourth wave correction should begin here or very soon. It may not move into first wave price territory below 1,221.34. If this wave count is invalidated then I will have full confidence that any downwards movement from here would be a new intermediate degree wave down.
Because minute wave ii shows so clearly on the daily chart minute wave iv should also. Minute wave ii was a deep 69% correction so minute wave iv should be shallow.
This analysis is published about 5:54 p.m. EST.