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The target for upwards movement to end was at 1,191 – 1,193. So far price has reached up to 1,191.72.

Summary: Monday’s candlestick is closing outside of the base channel, so as warned I must swap the wave counts over. The main wave count expects more upwards movement, with the target at 1,320 which may be met in another 30 sessions. The new alternate (which was the second alternate in last analysis) also expects more upwards movement, but only to 1,203 – 1,205 to be reached tomorrow.

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Main Daily Wave Count

Gold Elliott Wave Chart Weekly 2015

This new main wave count sees a five down complete at the weekly chart level for cycle wave a.

Within cycle wave a there is perfect alternation between the deep 0.68 running flat of primary wave 2 and the shallow 0.27 triangle of primary wave 4.

Ratios within cycle wave a are: primary wave 3 is 12.54 short of 1.618 the length of primary wave 1, and primary wave 5 has no Fibonacci ratio to either of primary waves 1 or 3. 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), primary wave 4 lasted 54 weeks (one short of a Fibonacci 55) and primary wave 5 lasted 17 weeks (no Fibonacci duration nor ratio to other primary waves).

Cycle wave a lasted 37 months, three longer than a Fibonacci 34.

Cycle wave b should last one to several years in total. Because cycle wave a subdivides as a five, cycle wave b may not move beyond its start above 1,921.15.

Cycle wave b must be a corrective structure. So far the first upwards wave within it labelled primary wave A subdivides only as a five wave structure. This indicates cycle wave b is either a simple zigzag or the first structure in a double is a zigzag. The degree of labelling within cycle wave b may be moved down one degree, and may be that primary wave A is unfolding as a zigzag with cycle wave b a flat correction.

In the first instance a zigzag is unfolding upwards. When it is complete then alternate wave counts will be required to manage the structural possibilities for cycle wave b. It may be that it is a relatively quick zigzag which would be over there, or that may be the first zigzag in a double zigzag, or the first structure in a double combination, or only wave A of a flat correction or triangle.

There is strong divergence with price and On Balance Volume at the end of cycle wave a. Primary wave 5 was a relatively short wave, which is common for fifth waves following triangles. If this wave count is correct then while cycle wave b unfolds OBV should find support at the trend line drawn. A breach of that trend line would favour the alternate wave count.

Since the low of cycle wave a volume for the weekly chart is higher for up weeks than down. This favours this main wave count at the weekly chart level.

Gold Elliott Wave Chart Daily 2015

I must swap the wave counts over with a breach of the black channel about primary wave B downwards. I consider this main wave count and the alternate below to have about an even probability at this stage.

After consideration at the weekly chart level I have moved the degree of labelling within cycle wave b up one degree.

A new high above 1,308.10 would invalidate the alternate and confirm this main wave count.

I have checked to see if primary wave A could be seen as a three wave structure and I cannot see this as a possibility which meets all EW rules. I am confident that this piece of movement is correctly labelled as a five wave diagonal.

Primary wave B may not move beyond its start below 1,131.09 because primary wave A subdivides as a five.

At 1,320 primary wave C would reach equality in length with primary wave A. This would complete a 5-3-5 zigzag trending upwards. At that stage alternate wave counts would be required to manage the various possibilities for cycle wave b.

At 1,429 primary wave C would reach 1.618 the length of primary wave A.

Because primary wave A is a diagonal then it is highly likely primary wave C will be an impulse in order to exhibit alternation. Primary wave C may end about the upper edge of the channel drawn about cycle wave b.

This wave count sill has problems of structure within primary wave 5 of cycle wave a:

– within primary wave 5 intermediate wave (2) is a running flat within its C wave, looking like a three and not a five.

– within intermediate wave (5) the count is seven which is corrective; either minor wave 3 or 5 will look like a three wave structure on the daily chart where they should be fives.

GOLD Elliott Wave Chart 2015

Primary wave C must subdivide as a five wave structure, most likely an impulse. Within it the first five up is incomplete.

The low of minuette wave (ii) at 1,159.72 overlaps the high of minute wave i at 1,160, slightly, so this cannot be a fourth wave correction. Because of this small overlap upwards movement is an incomplete five, beginning with two overlapping first and second waves, and a third wave now may be seen as complete.

My concern today is mostly with this hourly wave count because it does not agree with momentum: minuette wave (iii) is weaker than minuette wave (i). Sometimes this happens, and as long as the third wave has not the weakest momentum of 1, 3 and 5 then it may be acceptable.

There is no Fibonacci ratio between minuette waves (iii) and (i). At 1,207.03 minuette wave (v) would reach equality in length with minuette wave (iii). This target is also a maximum for minuette wave (v) because a third wave may never be the shortest.

When minute wave iii is a complete impulse then minute wave iv should unfold. It may be quick and not show on the daily chart because minute wave ii does not show on the daily chart. Minute wave iv is most likely to be shallow and sideways. It may not move into minute wave i below 1,160.

Draw a channel about minute wave iii using Elliott’s technique: draw the first trend line from the highs of minuette waves (i) to (iii), then place a parallel copy on the low of minuette wave (ii). When this channel is breached (if?) then minute wave iii would be confirmed as complete and minute wave iv as underway. Minuette wave (v) may end about the upper edge of the channel or it may overshoot this trend line. The structure of minuette wave (v) on the five minute chart is very difficult to see as complete at this stage.

Alternate Daily Wave Count

Gold Elliott Wave Chart Daily Alternate 2015

This was a new second alternate for yesterday’s analysis.

This alternate 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.

At 956.97 primary wave 5 would reach equality in length with primary wave 1. Primary wave 5 may last a total Fibonacci 55 weeks. So far it is now beginning its 36th week.

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.

This wave count still has a better fit in terms of better Fibonacci ratios, better subdivisions and more common structures within primary wave 5, in comparison to the main wave count above.

Within intermediate wave (3) minor wave 1 is a long extension. Within minor wave 1 minute waves iv and ii are grossly disproportionate, with minute wave iv more than 13 times the duration of minute wave i.

Minor wave 2 may not move beyond the start of minor wave 1 above 1,308.10. Minor wave 2 may complete in one more day to total a Fibonacci five. It may end about the 0.382 Fibonacci ratio. Because this is a second wave within a third wave one degree higher it should be expected to be more brief and shallow than a second wave correction normally is.

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

Gold Elliott Wave Chart hourly Alternate 2015

The structure at the hourly chart level at this stage has a better fit than the main wave count, particularly the triangle labelled minuette wave (b) within minute wave y.

Minor wave 2 may be unfolding as a double zigzag, with the second zigzag in the double close to completion. At 1,205 minuette wave (c) would reach 2.618 the length of minuette wave (a), and at 1,203 minor wave 2 would reach the 0.382 Fibonacci ratio of minor wave 1.

Once the final fifth wave upwards is complete, thereafter a new low below 1,160 would add some confidence to this wave count. It would still require a new low below 1,131.09 for full confidence in the downwards trend at primary degree.

At the hourly chart level the decrease in momentum would be expected. This hourly wave count fits better with MACD.

This analysis is published about 05:44 p.m. EST.