Downwards movement was again expected.
Summary: Downwards movement should continue for Tuesday to complete another red candlestick. A short term target is at 1,177. Wednesday may see some upwards movement for a B wave within this correction which may produce a small green candlestick or a doji on the daily chart. The trend remains down at minor degree, and the target for this correction to end is the same at 1,172.
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Main Daily Wave Count
There are more than thirteen possible corrective structures that cycle wave b may take. At this stage it is unclear what degree to label this big movement. After further consideration I will move the degree of labelling back down one degree, and this is more likely an incomplete zigzag for primary wave A.
Cycle wave b may be a flat correction where primary wave A is a zigzag. Cycle wave b may be a triangle where primary wave A is a zigzag. Cycle wave b may be a combination where primary wave W is a zigzag. Cycle wave b may be a double zigzag with the first in the double, primary wave W, incomplete.
When the big zigzag now labelled primary wave A is complete it is also possible that cycle wave b could be over there with the degree of labelling within it moved back up one degree.
A new high above 1,308.10 would invalidate the alternate and confirm this main wave count at primary and cycle degree.
The upwards wave labelled intermediate wave (A) fits only as a five wave structure, a leading expanding diagonal. Within a leading diagonal the first, third and fifth waves are most commonly zigzags, and the fourth wave should overlap first wave price territory.
Because intermediate wave (A) subdivides as a five, intermediate wave (B) may not move beyond its start below 1,131.09.
At 1,320 intermediate wave (C) would reach equality in length with intermediate 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 intermediate wave (C) would reach 1.618 the length of intermediate wave (A).
Because intermediate wave (C) is a diagonal then it is highly likely intermediate wave (C) will be an impulse in order to exhibit alternation. Intermediate wave (C) may end about the upper edge of the channel drawn about primary wave A.
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 with 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.
It is for these reasons that I will retain the alternate until price confirms finally which wave count is correct and which is invalidated.
The decline in volume for the last two days fits this main wave count. If price has entered a correction and not a new trend at a larger degree then it should be expected that during the correction volume declines. Minor wave 2 so far has lasted two days. It may complete in one more to total a Fibonacci three, or it may last three or six more days to total a Fibonacci five or eight. I have three hourly wave counts for you.
Main Wave Count – First Hourly
This first hourly wave count expects minor wave 2 to be the most likely structure of a zigzag. Within a zigzag minute wave a must subdivide as a five wave structure, and may be still incomplete.
Within minuette wave (iii) subminuette wave iv looks like an almost complete running contracting triangle. It may not move into subminuette wave i price territory above 1,195.84.
At 1,177 minuette wave (iii) would reach 1.618 the length of minuette wave (i).
When minuette wave (iii) is complete the invalidation point must move up to the end of minuette wave (i) at 1,202.03. Minuette wave (iv) may not move into minuette wave (i) price territory.
When minute wave a is a complete five wave impulse then minute wave b should unfold upwards and it may show up on the daily chart as a small green candlestick or doji, which would give minor wave 2 a three wave look on the daily chart. This first wave count expects minor wave 2 to be longer lasting, maybe a total Fibonacci five or eight days.
When minute wave a is complete the following correction for minute wave b may not move beyond the start of minute wave a above 1,219.99.
When the final fifth wave down out of the triangle is complete then if the following movement is another small sideways correction for minuette wave (iv) then this first hourly wave count would be correct.
Main Wave Count – Second Hourly
It is possible that minor wave 2 is close to completion as a single zigzag.
Sometimes zigzags are relatively brief structures. This second wave count expects minor wave 2 to be over in maybe one more day to total a Fibonacci three days. This is less likely than it lasting five or eight days.
Within minute wave c minuette wave (iv) may not move into minuette wave (i) price territory. Minuette wave (iv) may be an almost complete triangle.
At 1,176 minuette wave (v) would reach equality in length with minuette wave (i). At 1,172 minor wave 2 would end at the 0.618 Fibonacci ratio of minor wave 1. This $4 target zone may be met within 24 hours.
What happens after the next wave down out of the triangle will tell us which of these first two hourly wave counts is correct. If price begins to move strongly upwards and subdivides as an impulse this second wave count may be correct. A new high above 1,219.99 would provide confirmation, but confirmation is also required by structure.
If minor wave 2 ends shortly then the next upwards movement would be the start of minor wave 3, which should show an increase in upwards momentum, should begin with a five wave structure upwards on the hourly chart, and is likely to show an increase in volume on the daily chart.
Main Wave Count – Third Hourly
At this stage I judge this third hourly wave count to have the lowest probability of all three. I publish it only to consider all possibilities.
Minor wave 2 does not have to subdivide as a zigzag. It may be a flat correction. Within the flat correction minute wave a may be a complete three, a double zigzag.
Because minute wave a as a three only subdivides as a double zigzag (it cannot be seen complete as a single zigzag) the possibility of a combination at this stage is discarded. Within combinations each sub wave of W, Y and Z may only subdivide as a simple A-B-C corrective structure (or a triangle). W, Y and Z may not themselves subdivide as W, Y and Z multiples because the maximum number of corrective structures within a multiple is three.
If minor wave 2 is unfolding as a flat correction then within minute wave b must reach up to a minimum 90% length of minute wave a at 1,216.24. Minute wave b may make a new high above the start of minute wave a at 1,219.99. There is no upper invalidation point for this wave count.
For this wave count minute wave b should begin now. A new high above 1,195.84 would at this stage invalidate the first two hourly wave counts, and only if that happens would I seriously consider this third idea.
Minute wave b must subdivide as a corrective structure, most likely a zigzag. It is most likely to exhibit low volume on the daily chart and it should not show a strong increase in upwards momentum.
Alternate Daily Wave Count
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. Primary wave 5 may last a total Fibonacci 55 weeks. So far it is now in 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. This also reduces the probability of this wave count.
Although the invalidation point is at 1,308.10, this alternate wave count should be discarded long before that price point is reached. If the maroon channel is breached again by one full daily candlestick above it and not touching it then I would discard this alternate wave count.
A new low below 1,131.09 would confirm that intermediate wave (3) down is underway.
The decline in volume for the last two days now is concerning for this wave count. If minor wave 3 of intermediate wave (3) has just begun volume should increase. Minor wave 2 already has lasted 7 days and is longer than minor degree corrections normally are. Although it is possible that only minute wave a is over and this downwards movement is minute wave b, that would see minor wave 2 far too long in duration. The probability of that idea is very low indeed. So low I hesitate to publish it.
This analysis is published about 05:21 p.m. EST.