A green candlestick was expected for Tuesday’s session, but the quick sharp second wave correction did not happen.
Summary: The trend remains up. It should reach at least to 1,262.94 and it may get there next week. I don’t expect to see a correction on the daily chart now until minuette wave (b) arrives, which may be in another couple of days time.
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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 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 beginning its 13th week. It is barely possible it could end at the end of this week, it looks like it may need longer than this. It may end next week.
So far within minor wave C the highest volume is on four up days. This supports the idea that at this stage the trend remains up. Even for the last 11 trading days the highest volume is in four 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 in the early stages of the final fifth wave. 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 at 1,142.88.
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.
Yesterday’s wave count was wrong because subminuette waves i and ii were more likely already over.
Subminuette wave iii would reach 2.618 the length of subminuette wave i at 1,251. When subminuette wave iii is over subminuette wave iv to follow may not move into subminuette wave i price territory below 1,195.11. However, because subminuette wave ii did not show up on the daily chart as a red candlestick or doji, I would not expect subminuette wave iv to show up either. I expect most likely more green candlesticks for another one or two days to the end of minuette wave (a).
When I know where subminuette waves iii and iv within minuette wave (a) have ended then I will use subminuette wave degree to calculate a target for minuette wave (a) to end. I cannot do that yet. I may be able to do that tomorrow.
Draw a best fit parallel channel about this upwards movement. Expect corrections to continue to find support along the lower trend line. A strong fifth wave up may be able to break above the trend line.
When minuette wave (a) is over then I would expect a time consuming correction for minuette wave (b) to show up on the daily chart and last at least two or three days. It may be very choppy and overlapping. It may not move beyond the start of minuette wave (a) below 1,167.44, but it should find very strong support at the pink ii-iv trend line, if it even gets down that low. It could be a sideways consolidation phase.
This analysis is published about 6:22 p.m. EST.