A little downwards movement was allowed for. Price remains within the channel and above the invalidation points which are very close by.
Summary: Both bull and bear wave counts now expect upwards movement for a few days. The bull wave count has a minimum requirement at 1,232.49 and a maximum at 1,246.37. Upwards movement for the bull count may last about five days. The bear count requires upwards movement to a minimum at 1,237.28 and its maximum is the upper maroon trend line on the daily chart. It may last a little longer, maybe eight days. I favour the bull wave count.
To see weekly charts for bull and bear wave counts go here. Changes to last analysis are italicised.
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 (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.
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. The fourth wave must overlap first wave price territory.
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. So far minute wave iv is 0.88 of minute wave iii, a little deeper than normal range.
The maximum depth for minute wave iv is at 1,178.08 where it would reach equality in length with minute wave ii. Because the diagonal is contracting the fourth wave may not be longer than equality with the second wave, should be shorter, and the trend lines should converge. Minute wave iv is now most likely to be over.
Second wave corrections following leading diagonals in first wave positions are commonly very deep. When this leading diagonal structure for minor wave 1 is complete, then minor wave 2 should unfold lower, may be expected to reach at least the 0.618 Fibonacci ratio of minor wave 1 or may be quite a bit deeper than that, and may not move beyond the start of minor wave 1 below 1,142.82.
Minute wave iv is now a completed zigzag. Minuette wave (c) is 2.15 longer than equality in length with minuette wave (a).
Ratios within minuette wave (c) are: subminuette wave iii is 1.2 longer than 1.618 the length of subminuette wave i, and subminuette wave v has no adequate Fibonacci ratio to either of subminuette waves i or iii.
Within minuette wave (c), there is good alternation between subminuette waves ii and iv: subminuette wave ii is a relatively deep 0.53 zigzag and subminuette wave iv completed as a more shallow 0.23 double combination.
Minuette wave (c) now looks like a five wave structure.
If minute wave iv continues any further it may not move below 1,178.08.
Minute wave v must make a new high above the end of minute wave iii at 1.232.49 because the fifth wave of a leading diagonal may not be truncated. Minute wave v is most likely to end with a small overshoot of the i-iii trend line (seen on the daily chart).
The diagonal is contracting and so the final fifth wave may not be longer than equality in length with the third wave which would be achieved at 1,246.37. The third wave is shorter than the first wave, and a third wave may not be the shortest.
Minute wave v is most likely to subdivide as a zigzag. It may last a Fibonacci five days.
Depending on your risk appetite and approach to this analysis, there are two things you may look for to provide confidence that the next upwards swing has begun / is underway. A clear breach of the green channel drawn about the downwards wave of minute wave iv would provide trend channel confirmation of a trend change. A new high above 1,201.60 would provide price confirmation of a trend change; at that stage upwards movement may not be a fourth wave correction within minuette wave (c) and so minuette wave (c) would have to be over.
While there is no confirmation of a trend change, I will leave the invalidation point at 1,178.08. However, today I have a reasonable amount of confidence that the next upwards swing has begun.
Bear Wave Count
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 51st day and it is incomplete. It is now starting to look ridiculous; this is becoming a serious problem for the bear wave count.
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 structure which looks most likely at this stage to be an ending expanding diagonal.
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.
When the ending diagonal structure is complete, then this bear wave count expects a strong third wave down for minor wave 3 within intermediate wave (3). At that stage, a new low below 1,142.82 would provide strong indication that the bear wave count would be more likely than the bull wave count. Only a new low below 1,131.09 would provide full confidence.
The expectation for the bear wave count in the short to mid term is also for upwards movement.
For this bear wave count the diagonal is an ending expanding diagonal. This requires the final fifth wave of minuette wave (v) to be longer than minuette wave (iii) so upwards movement must move to at least 1,237.28 and most likely above.
The downside risk today is 1,179.03 for the bear wave count. If minuette wave (iv) continues any further it may not move beyond the end of minuette wave (ii).
For an ending diagonal all sub waves must be zigzags. Minuette wave (v) must subdivide as a zigzag.
Because this diagonal is expanding the final fifth wave is likely to be longer in duration as well as length. Minuette wave (i) lasted a Fibonacci two days and minuette wave (iii) lasted a Fibonacci five days. Minuette wave (v) may last a Fibonacci eight days.
ADX is still flat and below 15 indicating no clear trend. Sideways movement with short swings and low volatility should still be expected.
For yesterday’s downwards day Stochastics came down to just below 20. This may be an indication that the downwards swing is either over or very close to it, and the next upwards swing may now be expected.
Price has come to touch the lower lilac trend line which provided support back on 14th April. Downwards movement may end there, but it could yet continue a little lower to touch the lower aqua trend line.
The regular technical analysis picture still supports the Elliott wave count for both bull and bear. An upwards swing from this point would nicely fit all.
This analysis is published about 04:17 p.m. EST.