A little more downwards movement was still allowed for. The invalidation points are now extremely close by, but still not breached.
Summary: Both bull and bear wave counts still expect upwards movement for a few days. The bull wave count has a minimum requirement at 1,232.49 and a maximum at 1,242.91. Upwards movement for the bull count may last about five days. The bear count requires upwards movement to a minimum at 1,233.82 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 extremely 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.
Downwards movement to a new low was the final fifth wave, after subminuette wave iv moved further sideways as an expanded flat correction.
Minuette wave (c) now has a good five wave look to it on the hourly and daily charts.
There is still no adequate Fibonacci ratio between subminuette wave v and either of i or iii, but it is close to equality to subminuette wave i now that it is longer.
A new high above 1,192.29 could not be a second wave correction within subminuette wave v, so at that stage submineutte wave v would have to be over. It looks extremely unlikely that subminuette wave iv could continue even further sideways as a double flat, but that would remain technically possible.
Subminuette wave iv may not move into subminuette wave i price territory above 1,201.60. A new high above this point would confirm minuette wave (c) as complete.
A breach of the channel about this downwards zigzag would provide a lot of confidence that there has been a trend change and the next upwards swing has begun.
While we have zero confirmation that there has been a trend change, the risk remains that I’m wrong and price will continue lower past the invalidation points for both bull and bear wave counts. I am looking for an alternate wave count which would allow for this, but so far I cannot find one which meets all Elliott wave rules and has the “right look”.
Depending on your risk appetite and approach to this analysis, you may or may not want to wait for one or more of the conditions to be met before you have confidence that an upwards wave will unfold from here.
Within the leading diagonal, minute wave v may not be truncated and must move above 1,232.49.
The diagonal is contracting. Minute wave v may not be longer than equality with minute wave iii. Its maximum is equality with minute wave iii at 1,242.91.
Minute wave v may take a Fibonacci five days to unfold.
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 52nd 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.
This wave count is mostly the same as the hourly bull wave count. It also requires upwards movement from here.
The diagonal of minute wave c is expanding, so the final fifth wave of minuette wave (v) must be longer than minuette wave (iii). It must move above 1,233.82.
For the expanding diagonal, minuette wave (v) may take a Fibonacci eight days to unfold.
ADX remains flat and below 15 indicating a range bound consolidation phase continues. There is still no clear trend.
Stochastics has now spent a little time in oversold territory. The next upwards swing is now more likely to begin from here today. But it does not have to, price could yet move slightly lower and may even overshoot the lower aqua blue trend line as it has before.
A slight increase in volume for Thursday while price made a new low may indicate the end of this downwards swing.
The lower aqua blue trend line is so far again showing where price is finding support today. As before, this may initiate the next swing up.
This analysis is published about 04:11 p.m. EST.