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Although a small green candlestick is completing for Wednesday’s session, choppy sideways movement was not what was expected from the Elliott wave count. I had expected upwards movement.

Summary: The main bull wave count now requires sideways movement to complete a complex B wave, then downwards movement to end between 1,191 and 1,182, but not below 1,178.08. The bear wave count and alternate bull wave counts are the same for the short term: a fourth wave expanded flat must be over and a fifth wave up must unfold to a target now at 1,234. The price point which differentiates the two different ideas is now at 1,203.43, and a new low below this point would strongly favour the main bull wave count.

Click charts to enlarge.

To see weekly charts for bull and bear wave counts go here.

Bull Wave Count

Gold Elliott Wave Chart Daily 2015

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 (of which intermediate wave (A) or (1) is) 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.

Last week volume shows an increase. This supports the bull count a little, but the increase is not higher than prior down days within the sideways chop. For volume to clearly support the bull wave count it needs to show an increase beyond 187.34 (30th April) and preferably beyond 230.3 (9th April). Only then would volume more clearly indicate a bullish breakout is more likely than a bearish breakout.

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. At 1,320 intermediate wave (C) would reach equality in length with intermediate wave (A) and primary wave A would most likely be a zigzag. At 1,429 intermediate wave (3) would reach 1.618 the length of intermediate wave (1) and primary wave A would most likely be an incomplete impulse.

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.

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.

Minute wave iii is now most likely to be a complete zigzag. Minute wave iv down must subdivide as a zigzag, must overlap back into minute wave i price territory, and may not be longer than equality with minute wave ii because this diagonal is contracting. The maximum depth for minute wave iv is at 1,178.08. Minute wave iv may be over in three more days if it lasts a total Fibonacci five days.

Draw the diagonal ii-iv trend line as shown. Minute wave iv is likely to end when price touches this lower trend line, which may be a better guide for it than any price target.

Gold Elliott Wave Chart Hourly 2015

Today, at the daily and hourly chart level, the bull and bear wave counts diverge.

The problem is the upwards wave labelled subminuette wave a within minuette wave (b) on this chart, because it will not subdivide as a five wave structure on the five minute chart but it does subdivide nicely as a double zigzag. That fits this wave count, but not the bear or alternate bull wave count.

If my analysis of submineutte wave a as a double zigzag is correct, then we are seeing a B wave unfold sideways as either a double or single flat correction.

When an A wave subdivides as a three, it indicates either a triangle or a flat unfolding. Because the next movement was not a zigzag (it was a flat labelled micro wave A) this indicates minuette wave (b) may more likely be a flat. Within the flat correction, subminuette wave b must make a minimum 90% correction of subminuette wave a and must move down to 1,204.38 or below. Subminuette wave b may make a new low below the start of subminuette wave a at 1,203.43, and in fact is reasonably likely to do so because this would indicate an expanded flat which is the most common type.

At any stage, a new low below 1,203.43 would provide confirmation at the hourly chart level of this main bull wave count.

When subminuette wave b is complete, then a small five up for subminuette wave c would be required to complete a flat correction for minuette wave (b). When subminuette wave b is complete and the depth of it is known in relation to subminuette wave a, then the type of flat (regular or expanding) would be known.

Regular flats have a B wave which is 90 – 104% the length of the A wave. Expanded flats have a B wave which is 105% or more of the A wave. A regular flat expects the C wave to be about even in length with the A wave. An expanded flat expects the C wave to be 1.618 or sometimes 2.618 the length of the A wave.

Overall this main bull wave count expects very choppy overlapping movement for another day or so to complete a complex B wave. This is a small consolidation phase. As this B wave unfolds the wave count within it may very well change; of all the waves it is B waves which exhibit the greatest variety in form and structure and so require the most flexibility while they unfold. Often the correct structure is not known until they are over. At this stage, I can only say with confidence that if this is a B wave it is incomplete.

Minuette wave (b) may not move beyond the start of mineutte wave (a) above 1,232.49.

Alternate Bull Wave Count

Gold Elliott Wave Chart Daily 2015

Within a leading diagonal, the second and fourth waves must be zigzags. The first, third and fifth waves are most commonly zigzags (main bull wave count), but they may also be impulses. Both structures must be considered for the bull wave count. The alternate looks at the possibility that minute wave iii is an impulse.

Within minute wave iii, if it is an impulse then minuette wave (iv) subdivides perfectly as an expanded flat correction and must be over here. There is almost no room left for it to move lower, and may not move into minuette wave (i) price territory below 1,200.03.

Gold Elliott Wave Chart Hourly 2015

The subdivisions within subminuette wave c are slightly different from yesterday’s analysis. This has a slightly better fit.

Subminuette wave c is 2.48 longer than 1.618 the length of subminuette wave a.

Ratios within subminuette wave c are: there is no longer a Fibonacci ratio between micro waves 3 and 1, and micro wave 5 is just 0.11 short of 0.618 the length of micro wave 1.

Ratios within micro wave 3 are: there is no Fibonacci ratio between submicro waves (1) and (3), and submicro wave (5) is 0.43 longer than 1.618 the length of submicro wave (3).

Ratios within submicro wave (3) are: minuscule wave 5 is 0.26 longer than 1.618 the length of minuscule wave 1, and minuscule wave 5 is 0.11 longer than equality in length with minuscule wave 3.

Ratios within submicro wave (5) are: there is no Fibonacci ratio between minuscule waves 3 and 1, and minuscule wave 5 is 0.91 longer than equality with minuscule wave 3.

On the five minute chart, I have tried to see if subminuette wave i will subdivide as a five wave structure, either a leading diagonal or an impulse, and so far I cannot see a solution. This does not mean a solution does not exist; I have found sometimes a wave is difficult to see on a specific time frame so it should be looked at a higher or lower time frame for clarity. This wave count assumes a solution exists which I have not yet found. It may also be that a leading diagonal is unfolding in a first wave position to start minuette wave (v) upwards.

At 1,234 minuette wave (v) would reach equality in length with minuette wave (i).

Subminuette wave ii may not move beyond the start of subminuette wave i below 1,203.43.

I have also considered the possibility that minuette wave (iv) is not over and requires a final fifth wave down. But that would see the current sideways movement as a small fourth wave correction, which would be incomplete and so grossly disproportionate to its prior second wave equivalent. That would give subminuette wave c a three wave look where it should be a clear five, and it would also look like a three on the daily chart. For these reasons I have discarded the idea and moved the invalidation point up from 1,200.03 to 1,203.43. Minuette wave (iv) must be over now.

Bear Wave Count

Gold Elliott Wave Chart Daily 2015

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 46th 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 for both bull and bear counts is identical.

At 1,236 minuette wave (v) would reach equality in length with minuette wave (i).

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.

Gold Elliott Wave Chart Hourly 2015

All subdivisions and so all Fibonacci ratios, invalidation points, and targets are identical for this bear hourly wave count to the alternate bull hourly wave count.

Technical Analysis

Gold Chart Daily 2015

For yesterday’s data ADX flattened off, moving slightly below 15. This indicates there is no clear trend currently existing. The +DX line (solid green) remains very slightly above the -DX line (red dashed) indicating that if a trend develops it may be more likely to be up at this stage.

Price remains above the 34 day EMA, also indicating an upwards trend may be more likely.

Volume for yesterday’s down day showed a slight increase beyond the day before, but not beyond the prior four up days. This supports and upward breakout at this stage.

However, over the whole of this sideways chop since 27th March it remains the two down days of 9th April with 230.3K and 30th April with 187.8K which have the highest volume. This is some indication that a breakout may be more likely to be down.

Overall the regular TA picture is one of a lack of clarity. Direction is unclear, no clear trend exists, and it cannot be said with any confidence that the final breakout will be up or down.

With price now firmly back in the sideways zone delineated by horizontal lines, these may again be used for support and resistance. But extreme caution with any trading method is advised, because this sideways consolidation is close to maturity.

This analysis is published about 05:40 p.m. EST.