Another red candlestick was expected. However, a little upwards movement to 1,176 was expected first and this did not happen. Price moved sideways to complete a small triangle for the fourth wave correction and not a zigzag.
Summary: The trend remains down at minor and intermediate degree. The structure is incomplete. The short term target for minuette wave (iii) to end is at 1,142. I expect another red candlestick for Thursday’s session.
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Main Daily Wave Count
This main wave count sees Gold as still within a primary degree downwards trend, and within primary wave 5 intermediate wave (3) has begun. At 956.97 primary wave 5 would reach equality in length with primary wave 1. For Silver and GDX this idea, that the primary trend is down, is the only remaining wave count. This main wave count has a higher probability than the alternate below.
Within cycle wave a primary wave 1 lasted a Fibonacci 3 weeks, primary wave 2 lasted 53 weeks (two short of a Fibonacci 55), primary wave 3 lasted 37 weeks (three more than a Fibonacci 34), and primary wave 4 lasted 54 weeks (one short of a Fibonacci 55).
Primary wave 5 is now in its 35th week and the structure is incomplete. The next Fibonacci number in the sequence is 55 which would see primary wave 5 continue for a further 20 weeks, give or take up to three either side of this number. Although I am expecting primary wave 5 to be equal in length with primary wave 1 that does not mean it must also be equal in duration.
The maroon channel about cycle wave a from the weekly chart is now breached by a few daily candlesticks and one weekly candlestick. If cycle wave a is incomplete this channel should not be breached. The breach of this channel is a warning this wave count may be wrong, and so I will still retain the alternate.
Draw the maroon trend line on a weekly chart on a semi-log scale, and copy it over to a daily chart also on a semi-log scale (see this analysis for a weekly chart).
To see daily charts showing the whole of intermediate wave (1) from its start at 1,345.22, and an explanation of why this main wave count has a higher probability than the alternate, see the last analysis showing charts to that date here.
A new low below 1,131.09 would confirm that intermediate wave (3) down is underway.
Intermediate wave (2) may not move beyond the start of intermediate wave (1) above 1,345.22. If this invalidation point is passed this wave count would be fully invalidated.
Within intermediate wave (3) minor wave 1 is a completed impulse lasting 18 days. Minor wave 2 is a completed double flat correction which lasted 9 days, exactly half the duration of minor wave 1. Because this is a second wave correction within a third wave one degree higher I would expect it to be more shallow than normal.
Minor wave 3 may total either a Fibonacci 21 or 34 days, depending on how long the corrections within it take. So far it has lasted only 7 days.
Draw a base channel about minor waves 1 and 2. Minor wave 3 should have the power to break through support at the lower edge. Along the way down upwards corrections should find resistance at the upper edge. Copy this channel over to hourly charts. While the lower edge continues to provide support the alternate wave count should be considered as a possibility.
Since the top labelled intermediate wave (2) volume is still strongest on down days.
On Balance Volume continues to agree with the downward trend for price.
Yesterday’s analysis expected subminuette wave iv to complete as a quick zigzag up to 1,176. This did not happen as price moved sideways before continuing down. I had failed to consider other structural possibilities which would still provide alternation with the flat correction of subminuette wave ii.
Subminuette wave iv is most likely complete as a regular contracting triangle. Micro wave E overshoots the A-C trend line, which is less common than an undershoot of the trend line but perfectly acceptable (E waves either undershoot or overshoot that line).
So far within subminuette wave v it looks like an incomplete impulse. It will remain most likely incomplete while micro wave 4 remains below micro wave 1 price territory. If price moves above 1,156.84 then I would expect that subminuette wave v was actually over and minuette wave (iii) would also be complete. Minuette wave (iv) would at that stage be underway.
At 1,142 minuette wave (iii) would reach 2.618 the length of minuette wave (i). As soon as the final fifth wave of micro wave 5 could be seen as complete I would expect Gold to begin another fourth wave correction.
Minuette wave (ii) shows slightly on the daily chart, but it has no green candlesticks or doji. Minuette wave (iv) is unlikely to have green candlesticks or green doji for the wave count to have the right look at the daily chart level. Minuette wave (iv) may have a red doji and still have the right look.
Minuette wave (iv) is most likely to end within the price territory of the fourth wave of one lesser degree, between 1,155 and 1,171.
Minuette wave (iv) may not move into minuette wave (i) price territory above 1,195.45.
Subminuette wave v may be contained within the orange channel drawn about minuette wave (iii). Minuette wave (iv) should break out of this channel with upwards movement.
When minuette wave (iii) is over then the channel must be redrawn about minuette waves. Draw the first trend line from the end of minuette wave (i) to wherever minuette wave (iii) ends, then place a parallel copy on the end of minuette wave (ii). Minuette wave (iv) may find resistance at the upper edge of this channel.
Minuette wave (ii) was a quick and deep 0.70 zigzag. Minuette wave (iv) should show alternation so should be shallow and sideways. Draw a Fibonacci retracement along the length of minuette wave (iii). If the 0.236 or 0.382 Fibonacci ratios end within the target zone of the fourth wave of one lesser degree then that Fibonacci ratio would provide a target for minuette wave (iv) to end.
Minuette wave (iv) is most likely to be a triangle, flat or combination. These are sideways structures. It should be choppy and overlapping, a typical corrective movement.
Looking ahead further, when minuette wave (iv) is complete then one final fifth wave down for minuette wave (v) will complete the entire structure of minute wave i, which is only the first wave within minor wave 3. At that stage minute wave ii should unfold, should show up clearly on the daily chart, should last a few days, and may be relatively shallow. This is the point at which the main and alternate wave counts will diverge, and the price point to differentiate them will be 1,223.33. Minute wave ii cannot move beyond the start of minute wave i. A new high above 1,223.33 would invalidate the main wave count and confirm the alternate at that stage.
The mid term target for minor wave 3 remains the same at 1,055 where it will reach 1.618 the length of minor wave 1. When minute waves i through to iv are complete I can add to the target calculation at a second wave degree, at that stage this target may widen to a small zone or it may change.
Alternate Daily Wave Count
At this stage I judge this alternate wave count to have a lower probability. The structure of downwards movement, and momentum, will determine which wave count is correct over the next few weeks. At this stage they both expect more downwards movement so there is no divergence in the expected direction.
This wave count sees a five wave impulse down for cycle wave a complete, and primary wave 5 within it a completed five wave impulse. The new upwards trend at cycle degree should last one to several years and must begin on the daily chart with a clear five up.
The first five up may be a complete leading expanding diagonal. Within leading diagonals the second and fourth waves must subdivide as zigzags. The first, third and fifth waves are most commonly zigzags but they may also be impulses. This wave count sees minor waves 1, 3 and 5 as zigzags.
Leading diagonals are almost always followed by deep second wave corrections, sometimes deeper than the 0.618 Fibonacci ratio. Intermediate wave (2) is now deeper than the 0.618 Fibonacci ratio and the structure of minor wave C is close to completion.
For this alternate wave count minor wave C down must subdivide as a five wave structure. The hourly chart would see the subdivisions exactly the same as the main wave count above, so to keep the number of charts at a minimum I will publish only one. For this alternate at 1,159 minor wave C would reach 0.618 the length of minor wave A.
Minor wave C is overshooting the lower trend line. Sometimes C waves do this. It is close to an end. When minute wave i for the main wave count can be seen as a completed five wave structure then this alternate would see minor wave C as complete.
Intermediate wave (2) of this new cycle degree trend may not move beyond the start of intermediate wave (1) below 1,131.09.
This analysis is published about 04:10 p.m. EST.