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Downwards movement and an increase in momentum were expected.

Summary: The short term target for subminuette wave iii is 1,153. I expect another red candlestick for Monday. At this stage the trend is down.

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Main Daily Wave Count

Gold Elliott Wave Chart Daily 2015

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.

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).

Within primary wave 5 intermediate wave (1) fits perfectly as an impulse. There is perfect alternation within intermediate wave (1): minor wave 2 is a deep zigzag lasting a Fibonacci five days and minor wave 4 is a shallow triangle lasting a Fibonacci eight days, 1.618 the duration of minor wave 2. Minor wave 3 is 9.65 longer than 1.618 the length of minor wave 1, and minor wave 5 is just 0.51 short of 0.618 the length of minor wave 1.

Intermediate wave (2) is an expanded flat correction. Minor wave C is a complete expanding ending diagonal. Within an ending diagonal all the sub waves must subdivide as zigzags. The fourth wave should overlap first wave price territory. Expanded flats are very common structures and ending diagonals are more common than leading diagonals.

This wave count has more common structures than the alternate wave count, and it has a better fit.

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

Intermediate wave (2) may not move beyond the start of intermediate wave (1) above 1,345.22. If this invalidation point is passed this wave count would be fully invalidated.

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 I would expect it to be more shallow than normal.

So far within intermediate wave (3) minor wave 1 lasted 18 days and minor wave 2 lasted 9 days. 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 4 days.

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. Copy this channel over to hourly charts. If this channel is breached on Monday (which I expect is very likely) this main wave count will further increase in probability over the alternate.

Since the top labelled intermediate wave (2) volume is still strongest on down days. Volume for 2nd March, a down day, was the highest since 5th February, also a down day.

At the end of this trading week On Balance Volume agrees with the downward trend for price. The increased volume bar for Friday also agrees the trend is down.

GOLD Elliott Wave Chart 2015

The green channel was breached and a new low below 1,189.64 provided confirmation and confidence that minor wave 3 down had begun.

At 1,055 minor wave 3 would reach 1.618 the length of minor wave 1. This target may be either 17 or 30 days away (give or take two either side of each number).

Within minor wave 3 I do not think that minute wave i is yet over. I will not be able to calculate a target for minute wave i until minuette waves (i) through to (iv) are complete, because the target may only be calculated at the earliest opportunity at minuette degree.

So far within minute wave i Friday’s session probably passed through the middle of it. I have checked the subdivisions within the last strongest wave down labelled sub micro wave (3) and I expect it only just completed at the end of Friday’s session. On the five minute chart I cannot see subminuette wave iii as complete.

At 1,153 subminuette wave iii would reach 4.236 the length of subminuette wave i.

Subminuette wave ii does not show up on the daily chart and so I expect neither will subminuette wave iv. Subminuette wave ii was a relatively deep 0.59 expanded flat correction. I expect subminuette wave iv will be a zigzag or zigzag multiple so it may be more brief than subminuette wave ii, and it is also likely to be shallow at either 0.236 or 0.382 the length of subminuette wave iii.

If the lower edge of the blue channel is breached on Monday then it should thereafter provide resistance to upwards movement. The channel may not be breached on Monday though, and downwards movement may move along the blue line with fourth wave corrections moving sideways along the way down.

I expect another red candlestick most likely for Monday with a decrease in downward momentum.

Subminuette wave iv may not move into subminuette wave i price territory above 1,201.74.

Alternate Daily Wave Count

Gold Elliott Wave Chart Daily Alternate 2015

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. It is possible now to see intermediate wave (2) as a deep 0.67 single zigzag. If it is over it may have lasted just a little under half the duration of intermediate wave (1).

My biggest problem with this wave count is the structure of intermediate wave (2) within primary wave 5. This is a rare running flat but the subdivisions don’t fit well. Minor wave C should be a five wave structure, but it looks like a clear three on the daily chart. If you’re going to label a running flat then it’s vital the subdivisions fit perfectly and this one does not. This problem is very significant.

Within intermediate wave (5) minor wave 3 looks like a three on the daily chart, where it should be a five. This movement may also be labelled with minor wave 3 ending higher and minor wave 5 looking like a three. Either way, one of the actionary waves within this downwards movement will look like a three and not a five which does not have the “right look” at the daily chart level.

Intermediate wave (2) may be an incomplete zigzag, which subdivides 5-3-5. The subdivisions within intermediate wave (2) for this alternate are exactly the same as for this movement on the main wave count which sees a first, second and now third wave unfolding subdividing 5-3-5.

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 one. For this alternate at 1,159 minor wave C would reach 0.618 the length of minor wave A.

For this alternate the channel is drawn in the same way, but here it is correctly termed a corrective channel. Minor wave C should find support and end at the lower edge of this channel. At this stage the structure within minor wave C is an incomplete five, and this wave count also would require some more downwards movement to complete it. This indicates either a very slow end to minor wave C with price hugging the lower blue trend line, or an overshoot of the trend line for minor wave C which is less likely.

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 10:23 p.m. EST.