Both bull and bear Elliott wave counts remain valid. Price has not yet told us which one is correct. I am concerned that volume is lower for Monday’s down day.
Summary: In the short term, both wave counts expect downwards movement from here. The short term target for the bull wave count is 1,172, and for the bear wave count the middle of a third wave needs to begin to a possible target at 1,139. The bull wave count expects a new low below 1,169.94 is highly likely to avoid a truncation, so a new low below this point is a minimum expectation for some more downwards movement.
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To see weekly charts for bull and bear wave counts go here.
Bear Wave Count
I am concerned that volume for Monday’s down day is lower. For this reason I will judge the bull and bear wave counts to be about even in probability at this stage.
This wave count follows the bear weekly count which sees primary wave 5 within cycle wave a as incomplete. At 957 primary wave 5 would reach equality in length with primary wave 1.
1. Intermediate wave (1) (to the left of this chart) subdivides perfectly as a five wave impulse with good Fibonacci ratios in price and time. There is perfect alternation and proportion between minor waves 2 and 4.
2. Intermediate wave (2) is a very common expanded flat correction. This sees minor wave C an ending expanding diagonal which is more common than a leading expanding diagonal.
3. Minor wave B within the expanded flat subdivides perfectly as a zigzag.
1. Intermediate wave (2) looks too big on the weekly chart.
2. Intermediate wave (2) has breached the channel from the weekly chart which contains cycle wave a.
3. Minute wave ii breaches a base channel about the first and second wave one degree higher, minor waves 1 and 2. It is deeper and longer lasting than normal for a low degree second wave within a third wave one and two degrees higher.
4. Within minor wave 1 down there is gross disproportion between minute waves iv and ii: minute wave iv is more than 13 times the duration of minute wave i, giving this downwards wave a three wave look.
This wave count now expects to see a strong increase in downwards momentum as a third wave unfolds. At 1,059 minor wave 3 would reach equality in length with minor wave 1, and both would be extended.
Within minor wave 3, if minute wave ii continues further as a double flat or combination then it may not move beyond the start of minute wave i above 1,224.35.
Draw a blue base channel about minor waves 1 and 2. Create a parallel copy and push it up to sit on the high of minute wave ii, then copy these trend lines over to the hourly chart. Look for upwards movement to find resistance at the blue trend lines.
Gold remains range bound. Although volume for Monday is lower than the prior up day, overall volume within this range is still highest on down days. This may indicate that the breakout when it finally comes is more likely to be down than up, but today that is not as clear as it was a few days ago.
Within the bear wave count there are now seven overlapping first and second waves. This indicates explosive downwards movement ahead, but it keeps failing to materialise. The bull wave count must be taken seriously while the bear wave count is failing to prove itself.
Only a new low below 1,142.82 would provide price confirmation of the bear wave count. While price is above that point both wave counts will be valid.
For the bear wave count the middle of the third wave is likely to be very extended. At 1,139 micro wave 3 would reach 4.236 the length of micro wave 1.
This target fits nicely with the lower target for minute wave iii to reach 4.236 the length of minute wave i at 1,081.
In the very short term submicro wave (2) may not move beyond the start of submicro wave (1) above 1,191.84.
However, I will leave the invalidation point for the bear wave count at the hourly chart level at 1,200.03 today. It is possible that subminuette wave ii is not over and is continuing to drift sideways. This may explain lower volume for Monday if it is still within a small correction.
Bull Wave Count
This new bull wave count was presented as an update over the weekend. It has a much better fit and higher probability than the prior bull wave count.
The bull wave count sees primary wave 5 and so cycle wave a as a complete five wave impulse on the weekly chart. In order for members to judge for themselves I will list all points for and against for bull and bear wave counts.
1. The size of the upwards move labelled here intermediate wave (A) looks right for a new bull trend at the weekly chart level.
2. The downwards wave labelled intermediate wave (B) looks best as a three.
3. The small breach of the channel about cycle wave a on the weekly chart would be the first indication that cycle wave a is over and cycle wave b has begun.
1. Within intermediate wave (3) of primary wave 5 (now off to the left of this chart), to see this as a five wave impulse requires either gross disproportion and lack of alternation between minor waves 2 and 4 or a very rare running flat which does not subdivide well.
2. Intermediate wave (5) of primary wave 5 (now off to the left of the chart) has a count of seven which means either minor wave 3 or 5 looks like a three on the daily chart.
3. Expanding leading diagonals are are not very common (the contracting variety is more common).
4. Minor wave 2 is now much longer in duration than minor degree corrections within impulses normally are for Gold.
Within cycle wave b primary wave A may be either a three or a five wave structure. So far within cycle wave b there is a 5-3 and an incomplete 5 up. This may be intermediate waves (A)-(B)-(C) for a zigzag for primary wave A, or may also be intermediate waves (1)-(2)-(3) for an impulse for primary wave A.
Intermediate wave (A) subdivides only as a five. I cannot see a solution where this movement subdivides as a three and meets all Elliott wave rules (with the sole exception of a very rare triple zigzag which does not look right). This means that intermediate wave (B) may not move beyond the start of intermediate wave (A) below 1,131.09. That is why 1,131.09 is final confirmation for the bear wave count at the daily and weekly chart level.
Intermediate wave (B) is a complete zigzag. Because intermediate wave (A) was a leading diagonal it is likely that intermediate wave (C) will subdivide as an impulse to exhibit structural alternation. If this intermediate wave up is intermediate wave (3) it may only subdivide as an impulse.
At 1,320 intermediate wave (C) would reach equality in length with intermediate wave (A), and would probably end at the upper edge of the maroon channel. At 1,429 intermediate wave (C) or (3) would reach 1.618 the length of intermediate wave (A) or (1). If this target is met it would most likely be by a third wave and intermediate wave (C) would most likely be subdividing as a five wave impulse.
This new bull wave count now sees minor wave 1 as a short impulse, and intermediate wave (C) or (3) as an impulse.
Minor wave 2 is an incomplete expanded flat correction. Minute wave b is a zigzag, which looks right on the daily chart. Minute wave c is an ending contracting diagonal. Contracting diagonals most often end with an overshoot of the 1-3 trend line, so I will look out for downwards movement to overshoot that lower green (i)-(iii) trend line before expecting that minor wave 2 may be complete.
Minor wave 2 may not move beyond the start of minor wave 1 below 1,142.82.
Minuette wave (v) must subdivide as a zigzag because this fifth wave is within an ending diagonal. So far subminuette waves a and b are most likely over.
Diagonals normally adhere well to their trend lines. For this bull wave count I wouldn’t expect more than a few overshoots of the upper green (ii)-(iv) trend line.
The wave count in the short term sees the subdivisions mostly the same. For this bull wave count subminuette wave c must subdivide as a five wave structure. Within it at 1,172 micro wave 3 would reach 1.618 the length of micro wave 1. When micro wave 3 is complete then the following correction for micro wave 4 may not move back up into micro wave 1 price territory above 1,181.80.
At the time preparation for this analysis both wave counts see submicro wave (2) as incomplete. It may not move beyond the start of submicro wave (1) above 1,191.84. I will put the invalidation point here on the hourly chart for this bull wave count because movement above 1,191.84 would see a big breach of the diagonal (ii)-(iv) trend line which would give this structure the wrong look.
The target for downwards movement to end for this bull wave count remains the same at 1,160 where subminuette wave c would reach 1.618 the length of subminuette wave a. This target may be met in four days if minuette wave (v) totals a Fibonacci eight days, if this expectation is wrong it may be too long. Minuette wave (v) may end more quickly than that.
The target for minor wave 2 to end at 1,160 would see minuette wave (v) move beyond the end of minuette wave (iii) at 1,169.94 avoiding a truncation. It would also see minuette wave (v) of this contracting diagonal overshoot the (i)-(iii) trend line, this is the most common look for a contracting diagonal.
This analysis is published about 04:16 p.m. EST.