Downwards movement was expected for one to three days towards the target. Upwards movement is finding resistance about the upper edge of the channel, with a strong overshoot.
Summary: With its structure so far incomplete and with the new low, I have more confidence today in expecting the final fifth wave to unfold downwards. The target remains at 1,136. If price reaches this first target and keeps dropping, or if it gets there and the structure is incomplete, then a second target is at 1,123. Overall, this downwards wave should last another one to three days. When it is done a bigger second wave correction should begin which may last three or five days.
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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 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 11 days. At 1,055 minor wave 3 would reach 1.618 the length of minor wave 1. Minor wave 3 may only subdivide as an impulse, and so far within it minute wave i only is almost complete.
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.
I will be looking for divergence to develop over the next few days with price moving lower and On Balance Volume beginning to move slightly higher. If that happens OBV would support the wave count. If it does not happen then the final fifth wave may be longer in length and duration than expected.
So far downwards movement from the end of minuette wave (iv) looks clearly like a three wave movement, and I don’t think it is possible to see minuette wave (v) over at the low.
The strong whipsaw which occurred during Tuesday’s session completed an expanded flat correction for subminuette wave ii. Within subminuette wave ii micro wave B is 208% the length of micro wave A, and micro wave C is just 0.81 short of 2.618 the length of micro wave A. The subdivisions fit perfectly. Although micro wave B is slightly longer than twice the length of micro wave A this is acceptable if the subdivisions fit. Within flat corrections B waves are very rarely longer than twice the length of their A waves, but there is no rule stating how long a B wave may be.
I would expect to see a small increase in downward momentum for subminuette wave iii. A very short term target for subminuette wave iii may be at 1,137 where it would reach equality in length with subminuette wave i.
Along the way down upwards corrections should continue to find resistance about the upper edge of the green channel. Although subminuette wave ii overshot the channel, the channel is not breached (no full hourly candlestick is above it and not touching it).
If subminuette wave iii ends about the target then the final fifth wave may either be very short reaching the first target for minute wave i, or it may be extended and reach the second target for minute wave i.
At 1,136 minuette wave (v) would reach equality in length with minuette wave (i). If this first target is met and price keeps dropping, or the structure is incomplete, then I will use the second target. At 1,123 minuette wave (v) would reach 0.618 the length of minuette wave (iii).
If minute wave i ends in another two sessions it would total a Fibonacci 13 sessions, which would be typical behaviour for Gold. This will at this stage be my expectation, give or take one day either side of this.
Within subminuette wave iii no second wave correction may move beyond its start above 1,160. If this invalidation point is breached it does not mean minuette wave (v) and minute wave i are complete because it may be that my labelling within minuette wave (v) is wrong and subminuette wave ii is moving higher. Only a new high above 1,164.20 would provide price confirmation that minute wave i is over.
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.
Draw 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 at the second, lower target at 1,123.
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. Any breach of this price point by the smallest amount, even intra minute, would invalidate this wave count fully.
This analysis is published about 02:22 p.m. EST.