I expected another red candlestick for Friday’s session. So far there is a small green candlestick, which may end as a green doji or it may end red. The main hourly Elliott wave count was confirmed, and minuette wave (iv) is an almost complete triangle.
Summary: The last small fourth wave correction is almost complete as a regular contracting triangle. The final wave E up is either over already or may be very soon indeed. It may not move above 1,161.85. The target down for minute wave i to end is at 1,128. It may end on Monday, or it may possibly be slow and last four days so minute wave i totals a Fibonacci 13, although this is less likely. The possibility of a swift strong fifth wave remains, but it too is less likely in this case.
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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 ending 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 19 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.
I am moving the invalidation point for this daily chart down today. Looking at the structure on the weekly chart, if primary wave 5 is incomplete then within it intermediate wave (2) should be over because to see intermediate wave (2) continue further would not have the right look. Within intermediate wave (3) no second wave correction may move beyond its start above 1,308.10.
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 it is more shallow than normal due to the strong downwards pull of intermediate wave (3).
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 9 days. At 1,055 minor wave 3 would reach 1.618 the length of minor wave 1.
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. While the lower edge is not breached (so far it is only overshot and not clearly breached) 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.
Main Hourly Wave Count
Minuette wave (iv) subdivides perfectly as a regular contracting triangle, which continues to find resistance at the upper edge of the channel about minute wave i.
Draw the channel using Elliott’s first technique: draw the first trend line from the ends of minuette waves (i) to (iii), then place a parallel copy on the end of minuette wave (ii).
While the triangle is unfolding MACD is hovering about the zero line. This is exactly how MACD should behave if a triangle is unfolding, and so I have confidence in my labelling of minuette wave (iv) as a triangle.
Subminuette wave e of the triangle may be ending or may have just ended. E waves most often fall short of the A-C trend line, sometimes they overshoot the trend line but this is less common. In this case the upper edge of the green downwards sloping Elliott channel may provide strong resistance causing subminuette wave e to fall short of the orange a-c trend line, giving this triangle the most typical look.
Subminuette wave e may not move beyond the end of subminuette wave c above 1,161.85.
At 1,128 minuette wave (v) would reach equality in length with minuette wave (i). Because minuette wave (iii) is a long extension, close to 2.618 the length of minuette wave (i), it is most likely that minuette wave (v) will not also be extended.
Minuette wave (v) may find support and may end when price comes to touch the lower edge of the Elliott channel.
If the lower green trend line is breached and if downwards momentum begins to build then look out for the less likely possibility that minuette wave (v) may be a long swift and strong fifth wave, typical of commodities. In that case it may reach equality in length with minuette wave (iii) at 1,089. I think this is very unlikely though.
If subminuette wave e is not over and continues it may unfold as a triangle, turning minuette wave (iv) into a nine wave triangle. This would require the green Elliott channel to be breached though, so it is more likely that subminuette wave e is either over already or will be before the market closes. When the lower orange b-d trend line of the triangle is breached this would indicate that the triangle is over.
Extend the triangle trend lines out to the right on the hourly chart. The point in time at which they cross over may see the end of minuette wave (v). This does not always work, but it works often enough for it to be something to look out for. This indicates that minuette wave (v) may end in another 16 hours.
If price moves above 1,161.85 I would consider the alternate below.
Alternate Hourly Wave Count
I am only publishing this alternate as a “what if?” because the invalidation point on the main hourly wave count is so close by.
I am discarding the idea that minuette wave (iv) may be a regular flat correction because upwards movement from the low labelled subminuette wave x does not look like an unfolding five wave structure. It would require too much more upwards movement to complete as a five, would be too long in duration, and would have to breach the green channel by too much for the wave count to have the “right look”.
Neither subminuette waves w nor y have B waves 90% or more the length of their A waves, so neither of these corrections are flats and they would both be zigzags. Within micro wave A of subminuette wave y the fifth wave of submicro wave (5) is slightly truncated (only by 0.02).
Minuette wave (iv) may be a multiple, but if it is then it is a double zigzag. The purpose of double zigzags is to deepen a correction when the first zigzag does not move price deep enough. Double zigzags normally have a clear slope against the main trend, they are not sideways structures. This movement is sideways and does not look like a double zigzag.
At 1,165 micro wave C would reach equality in length with micro wave A within subminuette wave y.
This alternate has an exceptionally low probability. Minuette wave (iv) may not move into minuette wave (i) price territory above 1,195.45.
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 for the main wave count. For this alternate minor wave C may not exhibit a Fiboancci ratio to 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. The price point which differentiates the two daily wave counts at that stage will be 1,223.33. This alternate will require movement above 1,223.33 and the main wave count would be invalidated with movement above 1,223.33.
Intermediate wave (3) must move beyond the end of intermediate wave (1) at 1,308.10.
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 04:26 p.m. EST.