I had expected another green candlestick for Wednesday’s session which is not what happened.
The Elliott wave count at the hourly chart level has changed again, but the picture at the daily chart level remains the same.
I have confidence in the overall expected direction.
Summary: This small red candlestick is an incomplete correction, and I expect this is the start of minuette wave (b) which should complete in a total four days minimum. This means Gold has just entered a consolidation phase. The breakout when it ends should be upwards. The target for it to end is at 1,203 – 1,202. When it is done the next movement for Gold should be minuette wave (c) up. I remain confident that despite my struggles in the last few days with structure on the hourly chart, the trend remains up at minute, minor and intermediate degree.
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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.
Again, the hourly chart for yesterday was wrong. Although I am struggling with how to label the subdivisions within this upwards movement, I am still confident that at this stage the trend is up at minute, minor and intermediate degrees.
Because Wednesday’s session shows as a red candlestick on the daily chart I do not expect that this is a fourth wave correction. Sideways and lower movement also has breached a channel, no matter how it is drawn, about prior upwards movement. Considering the length of the upwards wave labelled minuette wave (a) this current correction looks most likely to be minuette wave (b).
Ratios within minuette wave (a) are: subminuette wave iii has no Fibonacci ratio to subminuette wave i, and subminuette wave v is just 0.45 longer than 0.618 the length of subminuette wave i.
Within subminuette wave 3 there are no adequate Fibonacci ratios between micro waves 1, 3 and 5.
Ratios within micro wave 3 are: submicro wave (3) is 0.89 short of equality with submicro wave (1), and submicro wave (5) is just 0.30 longer than 0.618 the length of submicro wave (1).
So far within minuette wave (b) subminuette wave a may be a completed leading expanding diagonal. I would expect minuette wave (b) to show on the daily chart as at least two or three red candlesticks or doji, so it is very unlikely to be complete at this stage. At 1,203 subminuette wave c would reach equality in length with subminuette wave a. This is very close to the 0.382 Fibonacci ratio of minuette wave (a) at 1,202 so gives us a $1 target zone.
However, a word of warning. This is a B wave, which are the most difficult of all Elliott waves to analyse because B waves exhibit the greatest variety in form and structure. This B wave may not complete as a zigzag, as I am expecting, and could still morph into one of more than 13 possible structures. These possibilities include expanded flats and running triangles which could include a new high beyond the start of minuette wave (b) at 1,223.23. If my labelling of minuette wave (a) as complete is correct then we should expect at least another three days of more choppy overlapping sideways movement. The last two B waves at minuette wave degree lasted four and eight days, respectively, so I would expect this one to be most likely at least four days and probably longer.
The only other way I would be happy to label minute wave v so far would be by moving the degree of labelling within minuette wave (a) all down one degree, with only subminuette wave i complete and now subminuette wave ii incomplete. I am not labelling it as such at this stage though, because that would see minuette wave (a) too long. I expect that we are about to see a short A wave and a long C wave within this zigzag up for minute wave v.
This analysis is published about 7:30 p.m. EST.