Downwards movement was unexpected, although some upwards movement was allowed for in the bear Elliott wave count.
Summary: I have three wave counts for you today. The very short term expects a fifth wave up. Thereafter, the wave counts diverge. The bear wave count still requires a strong third wave down which keeps failing to eventuate, and volume is no longer clearly supporting this wave count. I have two bull wave counts: one expects a third wave up must end above 1,224.35 and the other allows for a second wave correction down to end below 1,169.94. While all three wave counts remain valid we must let price tell us which one is correct. Gold remains within a sideways range and the breakout still has not happened.
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To see weekly charts for bull and bear wave counts go here.
Bear Wave Count
I am again concerned that for the last three days it is up days with the strongest volume. If this bear wave count is correct volume should be strongest on down days, not up days. The strong third wave down keeps failing to eventuate. It may still do so, but the longer it takes and the increasing number of time consuming deep second wave corrections this wave count sees the lower the probability of a downwards breakout. This wave count requires a new low below 1,142.82 for confidence.
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.
Within the sideways range, which Gold entered on 27th March, it is still down days which have the highest volume.
Within the bear wave count there are now five overlapping first and second waves. This still indicates explosive downwards movement ahead, but it keeps failing to materialise. The bull wave counts 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.
I left the invalidation point yesterday at 1,200.03 for this bear wave count to allow for the possibility that subminuette wave ii could continue sideways which it has. It may be unfolding as another expanded flat correction, which are very common structures. Subminuette wave ii may not move beyond the start of subminuette wave i above 1,200.03.
Within subminuette wave ii micro wave B is a 99.6% correction of micro wave A, so this is a regular flat correction. Micro wave C has moved beyond the end of micro wave A so a truncation is avoided.
Within micro wave C the structure is unfolding as a simple impulse. Submicro wave (3) is just 0.45 short of 2.618 the length of submicro wave (1). At 1,199 submicro wave (5) would reach equality in length with submicro wave (1).
The target for minute wave iii remains the same at 1,081 where it would reach 4.236 the length of minute wave i.
Another time consuming deep second wave correction puts doubt on this bear wave count.
First Bull Wave Count
The bull wave count sees primary wave 5 and so cycle wave a a complete five wave impulse on the weekly chart.
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. The possible leading diagonal for minor wave 1 and particularly minute wave ii within it look too large.
Volume shows a small increase for an up day, but for volume to clearly support a bull wave count it needs to show an increase beyond that for 30th April which was 187.8K.
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.
It is possible that the intermediate degree movement up for the bull wave count is beginning with a leading diagonal in a first wave position for minor wave 1.
A leading diagonal must have second and fourth waves which subdivide as zigzags. The first, third and fifth waves are most commonly zigzags but sometimes they may be impulses.
Within diagonals the most common depth of the second and fourth waves is between 0.66 and 0.81. Minute wave ii is 0.67 of minute wave i.
Minuette wave (b) may not move beyond the start of minuette wave (a) below 1,169.94.
Minute wave iii may be either a zigzag or an impulse, more likely a zigzag.
Minute wave iii must move beyond the end of minute wave i above 1,224.35.
Minuette wave (c) or (iii) is unfolding as an impulse. Within it subminuette wave iv is a small triangle, which looks like it may now be complete. It may not move into subminuette wave i price territory below 1,184.48.
Within minuette wave (c) or (iii) no second wave correction may move beyond its start below 1,179.03.
Second Bull Wave Count
This second bull wave count was presented as an update over the weekend. It looks at an intermediate degree impulse unfolding upwards, with minor wave 1 a short brief impulse and minor wave 2 an incomplete expanded flat correction.
Minor wave 2 is now much longer in duration than minor degree corrections within impulses normally are for Gold.
Within minor wave 2 expanded flat minute wave b is a zigzag, which looks right on the daily chart. The ending contracting diagonal for minute wave c no longer looks as clear as it did yesterday. Contracting diagonals should have converging trend lines, and this one no longer has clearly converging trend lines. Because minuette wave (iii) is shorter than minuette wave (i) this diagonal must be contracting. Minuette wave (iv) has a limit and may not be longer than equality with minuette wave (iii). The upper limit for this wave count in the short term is at 1,209.86.
The diagonal requires a final fifth wave down which may only subdivide as a zigzag. Minuette wave (v) would be highly likely to end below the end of minuette wave (iii) at 1,169.94 to avoid a truncation.
Minor wave 2 may not move beyond the start of minor wave 1 below 1,142.82.
In the short term all three hourly wave counts see a fourth wave triangle completing which should be followed by a fifth wave higher. At 1,199 micro wave 5 would reach equality in length with micro wave 1.
Micro wave 4 may not move into micro wave 1 price territory.
When minuette wave (iv) is complete a final fifth wave down would be highly likely to move below 1,169.94.
This analysis is published about 05:39 p.m. EST.