In the short term upwards movement was expected from yesterday’s analysis on the hourly chart. The Elliott wave count remains exactly the same.
Summary: Gold is within a consolidation phase which should continue for at least one more day, and most likely longer. The structure of minuette wave (b) is incomplete, and should continue overall sideways. In the very short term this upwards movement may end about 1,226. Thereafter, either a five wave structure down or another three wave corrective structure sideways should unfold.
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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. Intermediate wave (2) needs at least one more week to complete. If it can do this in just one more week then it will be close enough to even in duration with intermediate wave (1).
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 12 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.
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.
There are still three groups of corrective structures that minuette wave (b) may be unfolding as: a flat, a triangle or a combination.
If minuette wave (b) is to be a very common flat correction, then the most common type is an expanded flat. This would require subminuette wave b to be a minimum of 105% the length of subminuette wave a at 1,224.16 or above. Thereafter, subminuette wave c downwards must unfold as a five wave structure and would most likely be 1.618 or 2.618 the length of subminuette wave a, depending on the length of subminuette wave b.
If minuette wave (b) is to be a triangle then within it subminuette wave b upwards is completing as a zigzag. It may move beyond the start of subminuette wave a at 1,223.23, and 40% of triangles do this. This is termed a “running” triangle. Thereafter, sideways movement in an ever decreasing range would complete the most common type of triangle, a contracting triangle.
If minuette wave (b) is to be a combination then within it the first structure would be labelled subminuette wave w, and this is a zigzag. Subminuette wave x upwards is an incomplete zigzag in the opposite direction, and it may end beyond the start of subminuette wave w at 1,223.23. Thereafter, a second corrective structure would unfold sideways and may be either a flat or a triangle.
The only corrective structures that I think can be eliminated for minuette wave (b) at this stage are all structures within the zigzag family: single, double and the very rare triple zigzags. This leaves the sideways moving types of structures.
Within this upwards zigzag of subminuette wave b or x at 1,226 micro wave C would reach 1.618 the length of micro wave A. At this stage it looks like submicro wave (4) may be completing as a small contracting triangle which may not move back into submicro wave (1) price territory below 1,214.43.
When price has made a new high (whether or not the target is met) then a subsequent new low below 1,214.43 may not be a fourth wave correction and so at that stage the upwards wave of micro wave C would have to be over. This would provide price confirmation that subminuette wave b or x is over and the next movement for subminuette wave c or y would have begun.
Minuette wave (b) may not move beyond the start of minuette wave (a) below 1,167.44. However, it should not get too close to this point as I am expecting it to be a sideways correction, not a quick sharp downwards movement. If it manages to get down that low it should find very strong support at the pink ii-iv diagonal trend line which you can see on the daily chart, because diagonals almost always adhere very well to their trend lines.
So far within this big diagonal of minor wave C (on the daily chart) within its zigzags minuette waves (b) have lasted (in order) one day, one day, four days and eight days. Because this final upwards zigzag of minute wave v should be longer in length than the last upwards zigzag of minute wave iii, it is likely to also be longer in duration. This means that within it minuette wave (b) is likely to be longer in duration also, and so it should be longer than four days. It may last as long as eight days in total.
This analysis is published about 2:08 p.m. EST.