Upwards movement was expected. The main Elliott wave counts remain the same, and a new bearish alternate will be added to daily analysis.
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 another four 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 a further seven 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 (C) is likely to subdivide as an impulse to exhibit structural alternation with the leading diagonal of intermediate wave (A). This intermediate wave up may be intermediate wave (3) which 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 0.83 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.
Minuette wave v may have begun with two overlapping first and second waves. When price breaks through resistance at the upper edge of the channel copied over here from the daily chart, then upwards momentum may increase as the middle of a third wave unfolds.
Minute wave v is most likely to be a zigzag. Because the diagonal is contracting, minute wave v may not be longer than equality with minute wave iii and may not move above 1,242.91.
For a leading diagonal, minute wave v may not be truncated and must move above the end of minute wave iii at 1,232.49.
When minuette waves (a) and (b) are complete, then a target may be calculated using the Fibonacci ratio between minuette waves (a) and (c).
The risk remains that my wave count is wrong and the next move may be down not up, while price remains within the downwards sloping channel. At this stage I would judge this wave count to have a slightly better than 50% probability compared to the bearish alternate below. When this channel is breached the probability will increase that the next move is up and should then be in its early stages. At that stage I would have a reasonable level of confidence that the next upwards swing has begun. While price remains within the channel I will leave the invalidation point at 1,178.08. If minute wave iv continues any further it may not move below this point.
At 1,212 subminuette wave iii would reach 2.618 the length of subminuette wave i.
A new high above 1,203.43 would invalidate the alternate bear wave count below. At that stage I would have a lot of confidence that upwards movement should continue to above 1,232.
Main 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 53rd 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 bear wave count also expects a zigzag up to have recently begun.
The ending diagonal of minute wave c is expanding. Minuette wave (v) must be longer than equality in length with minuette wave (iii), so it must move above 1,233.82.
Trend channel confirmation is still required for a reasonable level of confidence that the upwards wave has begun.
If minuette wave (iv) continues it may not move beyond the end of minuette wave (ii) below 1,179.03.
Alternate Bear Wave Count
It is possible for the bear wave count that minor wave 2 is over as a zigzag. Minute wave c does not have a very good five wave look to it on the daily chart.
A strong third wave down has begun, if this wave count is correct. A new low below 1,179.03 would increase the probability of this wave count to over 50%.
Within minor wave 3, minute wave i may be an incomplete impulse. Within minute wave i, minuette wave (iv) may not move into minuette wave (i) price territory above 1,203.43. This is why 1,203.43 would provide confidence in the main wave counts.
ADX remains below 15. No clear trend is evident still. A range bound trading system (sometimes called a swing trading system) should be employed as opposed to a trend following system.
An oscillator should be used to indicate support and resistance, and in this case for Gold the horizontal trend lines also show nicely where price is finding support and resistance. At this stage this approach expects an upwards swing from here, back up to the upper trend lines. I have chosen to use fast Stochastics as an oscillator because it nicely shows overbought and oversold, and is showing where each swing ended and the next began.
When using a range bound trading system the +DX and -DX lines are not used to indicate direction. Direction is indicated by Stochastics and the trend lines. Support and resistance are used.
The risk with this approach is that price could move lower and overshoot the lower aqua blue trend line before it returns to the upper trend lines.
A close of 3% or more of market value above or below the outer aqua blue trend lines, along with ADX moving higher above 15, is required to indicate an end to this range bound market and the start of a new trend.
This analysis is published about 05:15 p.m. EST.