Price moved lower as expected. A small candlestick, which may end as a doji for Thursday’s session, fits the Elliott wave count nicely.

Summary: Gold is within a consolidation phase which should continue for at least another two days, and maybe another six days or slightly longer. The breakout when it comes should be upwards. If it gets that low look for minuette wave (b) to find very strong support at the lower pink ii-iv trend line on the daily chart. The invalidation point is at 1,167.44.

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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. It looks like intermediate wave (2) will not end this week, and may last a little longer than a Fibonacci 13 weeks. I would expect it to now last another one or two weeks in total.

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 11 trading days the highest volume is in four up days.

Minor wave C may be either 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 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 am moving the degree of labelling within minuette wave (b) all down one degree today. It is too early for this correction to be over.

So far within this ending diagonal of minor wave C on the daily chart within its zigzags the B waves have lasted (in order) 1 day, 1 day, 4 days, 8 days. This final zigzag upward for minute wave v is expected to be longer in length than the prior upwards wave of minute wave iii, because the diagonal is expanding. Because this wave should be longer in length it is also very likely to be longer in duration.

I would expect minuette wave (b) to be four days minimum, and quite likely eight days or longer, although that does seem too time consuming. My analysis over the next few days will focus on seeing if this B wave could be complete… or not. I am confident that when it is over the breakout will be upwards.

Of all Elliott waves it is B waves which exhibit the greatest variety in form and structure. They can be quick sharp zigzags (which can even fool us into thinking they’re impulses; for a great example of this look at minor wave B to the low on the daily chart) or more often they are very time consuming overlapping sideways affairs which are difficult to analyse and are typical consolidation phases.

So far within minuette wave (b) there is a complete 5-3-5 downwards. This may be only subminuette wave a a bigger flat correction, or it may be wave w as the first structure in a double combination.

If minuette wave (b) is unfolding as a flat correction then subminuette wave b within it may make a new price extreme above the start of subminuette wave a at 1,223.23, and it is actually quite likely to do so as the most common type of flat is an expanded flat where B is 105% minimum the length of A, which would be achieved in this case at 1,224.16.

If minuette wave (b) is unfolding as a combination then the first structure in the double would be a completed zigzag labelled subminuette wave w. The purpose of combinations (and double flats and triangles) is to take up time and move price sideways. Fitting this purpose subminuette wave x may make a new high above the start of subminuette wave w at 1,223.23.

It is also possible that mineutte wave (b) could be unfolding as a triangle. For 40% of triangles their B waves move beyond the start of their A waves, and these are termed running triangles.

There is no upper invalidation point for these reasons.

Minuette wave (b) may not move beyond the start of minuette wave (a) below 1,167.44. If it does move as low as the pink ii-iv trend line of the big diagonal which you see on the daily chart, expect downwards movement to find very strong support there. Diagonals almost always adhere very well to their trend lines, only the smallest intra hour overshoot would be allowed and that would be unusual.

Because the first movement subdivides so nicely as a three minuette wave (b) is most likely to be a sideways overlapping movement, rather than a quick sharp zigzag.

This analysis is published about 2:17 p.m. EST.