Select Page

Movement below 1,170.83 was not expected and the Elliott wave count was invalidated. The bigger picture and the mid term outlook remain the same.

Summary: The fourth wave of the ending diagonal continued lower and is now even more likely to be complete. A final fifth wave up should unfold to 1,262.94 or above. It may last one week if intermediate wave (2) completes in a Fibonacci 13 weeks, but it looks like it may need a little longer.

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.

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. Even for the last nine trading days the highest volume is in two up days.

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 just beginning the final fifth wave. The downwards spike which invalidated the last labelling of this structure looks like a continuation of minute wave iv. If minute wave iv continues yet further it may not move beyond the end of minute wave ii below 1,142.88.

Within an ending diagonal all the sub waves must subdivide as zigzags. With downwards movement in the first trading day of 2015 minute wave iv now subdivides as a single zigzag rather than a double.

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 now clearly diverging. 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.

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.

I have considered the possibility that minor wave C ended at the high labelled minute wave iii at 1,238.38. If it did, it would have to be an ending diagonal which does not fit because the third and fifth waves within it do not subdivide as zigzags and instead subdivide as impulses. For this reason I do not think minor wave C is over yet and should continue higher.

GOLD Elliott Wave Chart 2015

Downwards movement to 1,167.44, which invalidated the last wave count, completed a clear five wave impulse. This should be the end of minute wave iv as a single zigzag.

Within minute wave iv minuette wave (b) subdivides as a running flat correction, with its C wave truncated by 3.12. I have checked the subdivisions carefully within minuette wave (b) and they fit perfectly.

Within minute wave iv there is no Fibonacci ratio between minuette waves (a) and (c).

The next upwards movement has begun as an impulse, but is incomplete. Within it sub micro wave (4) may not move into sub micro wave (1) price territory below 1,174.61. When a final upwards wave which may be sub micro wave (5) completes an impulse for micro wave 1 then the invalidation point must move down to the start of micro wave 1 at 1,167.44.

Along the way up I would expect downwards corrections to find strong support, and not breach the lower pink ii-iv trend line of the diagonal. Diagonals should conform very well to their trend lines, and is rare for them to not do so.

Despite the invalidation of the last wave count, I am still confident that overall upwards movement is not over and minor wave C is incomplete. The diagonal of minor wave C now has a better more typical look on the daily chart, now that its fourth wave is clearly bigger than its second wave.

This analysis is published about 1:31 p.m. EST.