Upwards movement for a fifth wave to a short term target at 1,199 was expected. Price moved higher, but has reached well above the target.
Summary: I will choose to publish one bull and one bear wave count today for serious consideration. These are the best of several possibilities I can see. The bull wave count expects a leading diagonal is unfolding upwards and the third wave must move above 1,224.35. The bear wave count expects a second wave correction is ending and also must move higher. Both wave counts see a five wave impulse upwards incomplete and in the short term a fourth wave correction within that impulse should take one to five days to unfold sideways. The short term invalidation point is at 1,200.03; the fourth wave may not move into first wave price territory.
Click on charts to enlarge.
To see weekly charts for bull and bear wave counts go here.
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 again shows an increase for Wednesday’s up day, to 170.7K. It is still not higher than the prior strongest volume within this sideways movement of 230.3K for 9th April, or 187.8K for 30th April. For volume to more clearly support the bull wave count it needs to be greater than 230.3 for an up day.
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 is most likely subdividing now as an impulse. Minute wave iii must move beyond the end of minute wave i above 1,224.35.
So far within minute wave iii there is a 5-3-5 up. Because this has not moved above minute wave i at 1,224.35, this cannot be a completed zigzag for minute wave iii.
There is no Fibonacci ratio between minuette waves (i) and (iii). Minuette wave (iii) is longer and shows stronger momentum than minuette wave (i), but it is shorter than 1.618 the length of minuette wave (i).
When minuette wave (iv) is complete then a target for the final fifth wave up to complete minute wave iii can be calculated.
Minuette wave (ii) lasted four days on the daily chart. It was a deep 0.70 zigzag correction. Given the guideline of alternation minuette wave (iv) may be expected to be more shallow, ending at either the 0.236 or 0.382 Fibonacci ratios at either 1,209.57 or 1,203.74.
Minuettte wave (iv) is most likely to be a flat, combination or triangle. These structures may include a new high above its start at 1,219.01 as in an expanded flat, running triangle or the X wave of a combination. There is no short term upper invalidation point for this correction.
Minuette wave (iv) may end about the mid line of this parallel channel, or less likely about the lower edge (if it is very time consuming).
Draw the channel using Elliott’s technique: draw the first trend line from the ends of minuette waves (i) to (iii), then place a parallel copy on the end of minuette wave (ii).
Minuette wave (iv) may not move into minuette wave (i) price territory below 1,200.03.
Bear Wave Count
Strong upwards movement for Wednesday could be a continuation of minute wave ii within minor wave 3, but I am judging this idea to have a better overall look. I will publish the other idea as an addendum to this analysis.
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. Minor wave 2 is much longer in duration than a minor degree correction within an intermediate impulse normally is for Gold. Normally a minor degree second wave within a third wave should last only about 20 days maximum. This one is in its 41st day and it is incomplete.
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 bear wave count now needs minute wave c upwards to complete as a five wave impulse. The short term outlook is exactly the same as the bull wave count, and the subdivisions on the hourly chart are exactly the same.
At 1,247 minute wave c would reach equality in length with minute wave a. Minor wave 2 would be very close to the 0.618 Fibonacci ratio at 1,242.
Minor wave 2 may not move beyond the start of minor wave 1 above 1,308.10. However, this wave count would be substantially reduced in probability well before that price point is passed. A breach of the upper maroon trend line, a parallel copy of the upper edge of the channel copied over from the weekly chart, would see the probability of this wave count reduced so much it may no longer be published before price finally invalidates it.
The hourly chart for both wave counts today is identical. They both expect sideways movement for a consolidation for one to five days, to be followed by a fifth wave up.
I will publish these daily charts only today at this stage. I will continue to consider all possibilities until price finally tells us which wave count is correct. Through a process of elimination the bull and bear wave counts detailed above are the best two possibilities. The wave counts below are published today to illustrate other possibilities, but the low probability of each means they should not be given too much weight or time in consideration.
If intermediate wave (B) or (2) is continuing it may be a flat correction. This requires minor wave B to correct to 90% of minor wave A at 1,292.47. The direction for this idea does not diverge from the main bull wave count, so it does not offer much to the analysis at this stage. I will keep following this idea and will again publish it if it shows merit.
Intermediate wave (B) or (2) may not move beyond the start of intermediate wave (A) or (1) below 1,131.09. This possibility clearly illustrates why 1,131.09 is an important final confirmation point for any bear wave count.
This follows yesterday’s bear wave count. Minute wave ii could be continuing as a double combination: flat – X – zigzag. Minute wave ii has strongly breached the base channel about minor waves 1 and 2, and it is much longer in duration than a minute degree correction should be. It is longer in duration than minor wave 2 one degree higher. This wave count does not have the right look at all. It should no longer be seriously considered. I will keep charting it and will only use it if it shows itself to be true with a huge drop in the next 48 hours.
This analysis is published about 06:01 p.m. EST.