I have a new bull Elliott wave count which resolves some of the problems with the prior bullish Elliott wave count.
Summary: Both bull and bear wave counts expect at least some downwards movement early next week: this new bull wave count down to 1,160 and the bear wave count for a very strong third wave down. Only a new low below 1,142.82 would invalidate the bull wave count and confirm the bear wave count.
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This update will provide only a new bull wave count. To see analysis for the bear wave count go here. The new bull wave count presented here will replace the prior bull wave count which I will discard.
Bull Wave Count
I would judge this bull wave count to be about 45% likely. The difference between bull and bear wave counts of about 10% is in my judgement due to volume indicators only.
The bull wave count sees primary wave 5 and so cycle wave a as 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. Minor wave 2 is now much longer in duration than minor degree corrections within impulses normally are for Gold.
Volume shows a small increase for an up day, but for volume to support the bull wave count it needs to show an increase beyond that for 30th April, six days ago. While up day volume is lower than 187.8K, the bear wave count will be favoured. At the weekly chart level, it is downwards weeks also which have stronger volume.
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.
This new bull wave count now sees minor wave 1 as a short impulse, and intermediate wave (C) or (3) as an impulse.
Minor wave 2 is an incomplete expanded flat correction. Minute wave b is a zigzag, which looks right on the daily chart. Minute wave c is an ending contracting diagonal. Contracting diagonals most often end with an overshoot of the 1-3 trend line, so I will look out for downwards movement to overshoot that lower green (i)-(iii) trend line before expecting that minor wave 2 may be complete.
Minor wave 2 may not move beyond the start of minor wave 1 below 1,142.82.
Because ending diagonals require all their sub waves to subdivide as zigzags, the problems of subdivisions for the prior bull wave count at the hourly chart level are all now resolved.
Minuette wave (v) must subdivide as a zigzag. So far subminuette wave a is a complete impulse and subminuette wave b is a complete zigzag. Subminuette wave c would be extremely likely to move at least slightly below the end of subminuette wave a at 1,178.97 to avoid a truncation, and minuette wave (v) also would be extremely likely to move beyond the end of minuette wave (iii) below 1,169.94 to avoid a truncation.
At 1,160 subminuette wave c would reach 1.618 the length of subminuette wave a, and a truncation for both subminuette wave c and minuette wave (v) would be avoided. Along the way down the diagonal trend lines should provide support and resistance (diagonals normally adhere well to their trend lines). There are a couple of small overshoots so far, that’s okay, but I wouldn’t expect any clear breaches.
This new bull wave count means that neither 1,178.97 nor 1,169.94 can now provide confidence for the bear wave count.
In the short term, when minuette wave (v) is a completed zigzag, then the low at 1,178.97 will differentiate the bull and bear wave counts. The bull wave count would then require upwards movement above this point and the bear wave count will require a fourth wave correction to not move back into first wave price territory above 1,178.97.
This analysis is published about 09:05 p.m. EST.