A little more upwards movement to the upper blue trend line was expected. Price has moved higher, but falls slightly short of this trend line.
Summary: It is very likely that minute wave ii is over and minute wave iii is beginning downwards now. The target for minute wave iii is at 1,048. Alternatively, we may see minute wave ii continue sideways for another one or three days, but this is less likely. Only if upwards movement provides a breach of the upper blue trend line on the daily chart will the main wave count be in doubt.
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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 minor wave 3 minute wave ii may not move beyond the start of minute wave i above 1,223.33.
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 13 days. At this stage I will not provide a target for minor 3 to end, and it may not exhibit a Fibonacci ratio to minor wave 1. When minute waves i through to iv within it are complete I will again calculate and provide a target for minor wave 3 to end. For now the focus will be on minute wave iii.
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. At this point in time the upper edge of this blue base channel is critical. If upwards movement continues over the next one or two days and breaches this trend line the main wave count will be in doubt. If the upper blue trend line is breached by one full daily candlestick above it and not touching it then I will swap the daily wave counts over and the alternate would be preferred.
Since the top labelled intermediate wave (2) volume is still strongest on down days.
On Balance Volume shows no divergence with price at the end of minute wave i. This supports the main wave count because if the alternate is correct and we have just seen a major low then OBV would be more likely to show some divergence. For this main wave count the trend remains down.
Main Hourly Wave Count
Minute wave ii is most likely over. I have checked the subdivisions of minuette wave (c) carefully on the five minute chart (provided below) and this structure looks complete.
From the high at 1,177.97 the first move down looks like a five, not a three. This supports the idea that minute wave ii is over.
There is no Fibonacci ratio between minuette waves (a) and (c).
Ratios within minuette wave (c) are: subminuette wave iii is 0.81 short of 4.236 the length of subminuette wave i, and subminuette wave v is just 0.07 short of 1.618 the length of subminuette wave i.
Within minute wave iii, subminuette wave ii may not move beyond the start of subminuette wave i above 1,177.97.
In the first instance I would have more confidence in this trend change if the upwards sloping green channel is breached by downwards movement. This would provide trend channel confirmation of a trend change.
Because minute wave ii is a second wave correction within a third wave one, two and three degrees higher, it may be expected to be more brief and shallow than second waves normally are. If minute wave ii is over now as a quick shallow zigzag that would fit the expectation for a brief shallow correction.
At 1,048 minute wave iii would reach 1.618 the length of minute wave i. Minute wave iii should show a clear strong increase in downwards momentum.
I will not make the publication of a five minute chart a regular feature, because in my opinion it often diverts and does not add to the analysis. In this case though it seems appropriate. This five minute chart shows only minuette wave (c) within minute wave ii, in order to explain how I see this five wave impulse as complete.
Alternate Hourly Wave Count
It is possible that minute wave ii is not over and may continue higher as a double zigzag or sideways as a double combination or flat correction.
This idea has a lower probability because it would see minute wave ii continue for either one more day to total a Fibonacci three days (if it is a double zigzag) and so break above the upper blue trend line of the based channel. This second wave correction is unlikely to break above that trend line because base channels normally provide strong support / resistance.
If minute wave ii continues sideways as an (a)-(b)-(c) flat correction, or (w)-(x)-(y) combination then it would be more time consuming, maybe completing in another three days to total a Fibonacci five. This is unlikely as minute wave ii would look better if it lasts only two or three days. Five seems a bit too long for a small second wave correction within a third wave one, two and three degrees higher.
This alternate wave count is possible, but it has a low probability. Unfortunately, expanded flats and combinations may both include a new low below the start of the correction at 1,142.82 so there is no lower price point which can differentiate the two hourly wave counts.
The only thing which will differentiate the wave counts is structure. The main wave count needs to see a five down develop and this alternate needs to see a three down develop. The main wave count labels current downwards movement subminuette waves i and ii. This alternate labels it subminuette waves a and b. When the next downwards piece is done it will be labelled subminuette wave iii for the main wave count and subminuette wave c for this alternate. How high the following movement goes will tell us which wave count is correct. At that stage if upwards movement breaks above 1,159.72 this alternate would be more likely and the main wave count less so because its fourth wave would be moving back into its first wave price territory.
If minute wave ii continues as a flat correction then within it minuette wave (b) must retrace a minimum 90% of minuette wave (a) at 1,146.34. Minuette wave (b) of an expanded flat may move beyond the start of minuette wave (a) below 1,142.82.
If minute wave ii continues as a combination then there is no minimum (or maximum) requirement for minuette wave (x), and it only needs to subdivide as a three wave structure.
Alternate Daily Wave Count
At this stage I judge this alternate wave count to have a lower probability. This is the point where this alternate wave count now diverges from the main wave count.
A new high above 1,223.33 would invalidate the main wave count and confirm this alternate. Before that price point is passed a clear breach of the blue channel about intermediate wave (2) with one full daily candlestick above the upper blue trend line and not touching it would provide trend channel confirmation for this wave count. At that stage it would substantially increase in probability and I would swap the main and alternate wave counts over.
Intermediate wave (3) must move beyond the end of intermediate wave (1) above 1,308.10. A new high above this point would provide full and final confirmation of this alternate wave count.
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 complete and 0.93 the length of intermediate wave (1).
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.
RSI has dipped below 30 which normally happens at the point of a more major trend change for Gold. However, this is not definitive. Looking back within cycle wave a I see other instances where RSI dips below 30 and does not precede a more substantial trend change: this happened for example at the low dated 19th Dec, 2012, where RSI dipped below 30 slightly only preceding a rise lasting 7 days, and RSI dips below 30 on 11th September, 2014, (just off to the left of the chart) yet price continued sideways and lower to find the low at 6th Oct, 2014.
In this instance there is very slight divergence with RSI and price. The price low of 11th March was followed by a new low on 17th March, yet RSI did not also make a new low. This divergence is only slight though, and if this low is a major low I would expect to see stronger divergence.
RSI is a small warning that this alternate may be correct, but it is not definitive in this case.
This analysis is published about 05:16 p.m. EST.