Lower highs and lower lows and volume continue to favour the bear Elliott wave count.
Summary: In the very short term one final small fifth wave down to 1,177 would complete an impulse for both wave counts at the hourly chart level. Thereafter, they again diverge. The bear count then expects a fourth wave correction which may not move into first wave price territory above 1,195.49. The bull wave count expects new highs. The mid term target for the bear wave count remains the same at 1,081 and may be met in six more days. The bull wave count requires movement above 1,224.35. Volume again favours the bear wave count.
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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. In order for members to judge for themselves I will list all points for and against for bull and bear wave counts.
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. Volume continues to not support this bull wave count. If a third wave up is beginning volume should show an increase, not a decrease. “When prices are rising volume decreasing is questionable.” (Kirkpactrick and Dahlquist)
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.
Minute wave ii may not move beyond the start of minute wave i below 1,142.82.
Minute wave iii may subdivide as either a zigzag or an impulse. This bull wave count must consider both structural possibilities. So far only minuette wave (a) or (i) would be complete. Minuette wave (b) or (ii) is almost complete.
Within minuette wave (b) or (ii) subminuette waves a and b are complete. Subminuette wave b is a common expanded flat correction. Subminuette wave c is extending. At 1,177 subminuette wave c would reach 2.618 the length of subminuette wave a, and micro wave 5 within it would reach equality in length with micro wave 1.
The channel drawn here is a best fit. When it is clearly breached by upwards movement that shall be an indication that minuette wave (c) or (iii) up may be underway.
Minuete wave iii must move beyond the end of minute wave i above 1,224.35.
I would have some confidence in this bull wave count if price moves above 1,215.20.
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.
4. Volume consistently supports the idea that the trend is currently down.
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. Minute wave ii breaches a base channel about the first and second wave one degree higher, minor waves 1 and 2. It is deeper and longer lasting than normal for a low degree second wave within a third wave one and two degrees higher.
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 wave count now expects to see a strong increase in downwards momentum as a third wave unfolds. At 1,059 minor wave 3 would reach equality in length with minor wave 1, and both would be extended.
Within minor wave 3, if minute wave ii continues further as a double flat or combination then it may not move beyond the start of minute wave i above 1,224.35.
Draw a blue base channel about minor waves 1 and 2. Create a parallel copy and push it up to sit on the high of minute wave ii, then copy these trend lines over to the hourly chart. Look for upwards movement to find resistance at the blue trend lines.
Volume for Thursday is slightly lower than Wednesday, but both days saw price move lower on volume which was higher than the prior two up days. Volume is clear, bears are more active pushing price lower. Volume consistently indicates a downward breakout is more likely than upward.
The bear wave count now sees Gold as within a subminuette degree first wave, within a minuette degree third wave, within a minute degree third wave, within a minor degree third wave, within an intermediate degree third wave. The trend at cycle degree remains down.
Once subminuette waves i and ii are complete then downwards movement should begin to show a very strong increase in downwards momentum, and down days should continue to show higher volume than up days.
In the very short term downwards movement for bull and bear wave counts is seen in the same way, because A-B-C of a zigzag and 1-2-3 of an impulse both subdivide 5-3-5 (they are exactly the same).
Once micro wave 3 within subminuette wave i is complete then this bear wave count would expect a small fourth wave correction which may not move back into micro wave 1 price territory above 1,192.49.
When micro waves 4 and 5 complete an impulse for subminuette wave i, then the bear wave count would expect a second wave correction for subminuette wave ii which may not beyond the start of subminuette wave i above 1,200.03.
The mid term target for minute wave iii remains the same at 1,081 where it would reach 4.236 the length of minute wave i. I will not have confidence in this target until price makes a new low below 1,142.82.
So far minute wave iii has lated seven days. It may end in another six days if it totals a Fiboancci thirteen. It may do this with a swift strong fifth wave extension; sometimes impulses for Gold start more slowly than they end.
This analysis is published about 04:11 p.m. EST.