The fourth wave ended not as a triangle, as expected, but as a double zigzag.

Summary: The final fifth wave down is underway. The target is at 1,136 and this may be met in one to three more days. The invalidation point is at 1,164.20. If the invalidation point is passed before the fifth wave is over then I would expect a deep second wave correction would have arrived to last either three or five days in total.

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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 beginning its 36th 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 point here.

A new low below 1,131.09 would confirm that intermediate wave (3) down is underway.

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 10 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 today has turned up, but with price also not making a new low OBV still agrees with the trend. There is no divergence at this stage.

I had expected minuette wave (iv) to complete as a contracting triangle, but the triangle was invalidated when price moved above 1,161.83. Minuette wave (iv) subdivides only as a double zigzag, both upwards sloping corrective structures for subminuette waves w and y only subdivide as zigzags. This is an atypical looking double zigzag in that the second zigzag does not deepen the correction.

Minuette wave (ii) was a quick deep 0.70 single zigzag lasting 12 hours. Minuette wave (iv) is a more shallow 0.25 time consuming double zigzag lasting 62 hours. Because it is already so much longer in duration to minuette wave (ii) it is extremely likely to be over now. The final fifth wave of minuette wave (v) may be more time consuming than minuette wave (i) if minute wave i is to complete in a total Fibonacci 13 days. This would see minuette wave (v) as slow moving wave, lasting another three days.

At 1,136 minuette wave (v) would reach equality in length with minuette wave (i).

Minuette wave (v) may only subdivide as a five wave structure, either an impulse (more likely) or an ending diagonal (less likely). Within it subminuette wave ii may not move beyond the start of subminuette wave i above 1,164.20.

This hourly chart is exactly the same wave count as the first hourly chart, I am zooming out to show the entire structure of minute wave i so far.

Now that the fourth wave is over because it breached the channel drawn using Elliott’s first technique, redraw the channel using Elliott’s second technique. Draw the first trend line from the ends of minuette waves (ii) to (iv), then place a parallel copy on the end of minuette wave (iii). In this instance if minuette wave (v) is slow moving then it may move along and end in the mid line of the channel.

If minuette wave (v) is faster moving then it may end at the lower edge of the channel.

Along the way down upwards corrections should find resistance at the upper edge of the channel.

If the lower edge of the channel is breached and downwards momentum builds, then there is a possibility that minuette wave (v) may be a swift strong fifth wave, typical of commodities. If that happens it may end below the target. A possible target for a stronger fifth wave would be either 1,122 where it would reach 0.618 the length of minuette wave (iii), or at 1,097 where it would reach equality in length with minuette wave (iii). In this case I expect this to be unlikely, it is more likely this fifth wave will be slow and momentum will show divergence with the third wave.

When the channel is clearly breached by upwards movement then the final fifth wave may be expected to be over and the next movement, minute wave ii, should be underway. At that stage a new high above 1,164.20 would provide price confirmation that minute wave ii is underway.

When this final fifth wave is over that would complete a five wave impulse down for minute wave i. The next correction for minute wave ii should show up clearly on the daily chart, lasting either a Fibonacci three or five days. If it gets that high it should find strong resistance, and not breach the upper edge of the blue base channel copied over here from the daily chart. It may not move beyond the start of minute wave i above 1,223.33.

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 04:31 p.m. EST.