Upwards movement was not expected.
Price has so far reached to just below a short term invalidation point.
Summary: The bear wave count still requires more downwards movement to a minimum at 1,165.76. The bull count requires upwards movement to a minimum 1,195.71. There is no clear trend, and the bear wave count (which is slightly favoured at this point) sees Gold in a B wave within a second wave correction. Of all Elliott waves, B waves exhibit the greatest variety in form and structure, and low degree B waves do not normally offer good trading opportunities.
To see the bigger picture and weekly charts 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. I have tried to see a solution for this movement, and no matter what variation I try it always has a major problem.
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. Volume does not support this bull wave count.
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) for an up day. 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.
Minor wave 2 is over here. Minute wave c is just 2.7 longer than 1.618 the length of minute wave a. At 1,288 minor wave 3 would reach 1.618 the length of minor wave 1.
Within minor wave 3, no second wave correction may move beyond its start below 1,162.80.
A new high above 1,232.49 would eliminate the bear wave count and provide full confidence in the targets.
Hourly Bull Wave Count
Minute wave i must subdivide as a five wave structure, either an impulse or a leading diagonal. Leading diagonals are most commonly contracting, with the expanding variety not so common. This rarity reduces the probability of this wave count.
Leading diagonals require the second and fourth waves to subdivide as zigzags, and the fourth wave must overlap first wave price territory, which this one does. The first, third and fifth waves are also most often zigzags.
The most common depth of second and fourth waves within diagonals is between 0.66 to 0.81 the prior wave. Here minuettte wave (ii) is 0.54 and minuette wave (iv) is 0.86. Neither are within normal range further slightly reducing the probability of this wave count.
Within minuette wave (iv) zigzag, subminuette wave b is labelled as a double zigzag, but it has an atypical look. This structure moves sideways, whereas double zigzags should have a clear slope against the main trend and not a sideways look.
If minuette wave (v) has begun, then it must be longer than minuette wave (iii), because the diagonal is expanding, and must reach above 1,195.71. Leading diagonals may not have truncated fifth waves so minuette wave (v) must end above the end of minuette wave (iii) at 1,192.44.
At 1,203 subminuette wave c would reach 1.618 the length of subminuette wave a.
Within subminuette wave c, no second wave correction may move beyond its start below 1,174.71.
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. For this piece of movement, the bear wave count has a much better fit than the bull wave count.
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 at the weekly and daily chart continues to favour the bear wave count. Since price entered the sideways movement on 27th March it is a downwards week which has strongest volume, and it is downwards days which have strongest volume.
5. On Balance Volume on the weekly chart recently breached a trend line from back to December 2013. This is another bearish indicator.
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 44 days long.
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.
Minor waves 1 and 2 are complete. Minute wave i within minor wave 3 may be incomplete on the hourly chart.
Minute wave ii may not move beyond the start of minute wave i above 1,232.49.
A new low below 1,142.82 would provide a lot of confidence in this bear wave count. At that stage, the bull wave count may not be continuing its second wave correction. But only a new low below 1,131.09 would invalidate any variation of a bull wave count and provide full and final confirmation for a bear wave count.
Main Hourly Bear Wave Count
The structure of minuette wave (a) is the key to this correction for minute wave ii. This upwards movement (now off to the left of the chart) subdivides perfectly as a triple zigzag; it will not subdivide as a five because it fits neither as an impulse nor a complete diagonal. The first wave within minute wave ii is a multiple, which eliminates the possibility of a combination because multiples may not exist within multiples. The maximum number of corrective structures within a multiple is three.
When A waves subdivide as threes a flat correction is indicated, and because minuette wave (a) is a corrective structure a zigzag may be eliminated for minute wave ii.
Minute wave ii may only be a flat correction (at least, the first structure within it must be a flat). This requires minuette wave (b) to reach a minimum 90% retracement of minuette wave (a) at 1,165.76. At 1,164 subminuette wave c would reach 1.618 the length of subminuette wave a.
Within subminuette wave c, micro wave 2 may not move beyond the start of micro wave 1 above 1,190.61. If this main wave count is correct, then a third wave down must begin from here.
If upwards movement continues above 1,190.61, then I will use the alternate below. It is concerning for this wave count today that micro wave 2 is so deep and time consuming; I would not have expected to see it show up on the daily chart.
Alternate Hourly Bear Wave Count
There are multiple structural possibilities for minuette wave (b). The only thing required of it is that it moves back down to 1,165.76 or below.
Of all Elliott waves, it is B waves which exhibit the greatest variety in form and structure, from quick sharp deep zigzags to very time consuming complicated combinations. At the daily chart level, the last five daily candlesticks look like a typical B wave so far.
This alternate wave count looks at the possibility that minuette wave (b) may be a double combination or double zigzag. The first structure in the double is a zigzag labelled subminuette wave w. Within it, micro wave C is slightly truncated reducing the probability of this wave count to an alternate. The subdivisions all fit.
Within a double combination, the X wave may make a new price extreme beyond the start of the first structure in the double labelled subminuette wave w. Subminuette wave x has no upper invalidation point and may move above 1,192.44.
Within a double zigzag, the X wave is normally a quick shallow zigzag. This one is a deep expanded flat, so a double combination may be more likely than a double zigzag.
The second structure in the double may be either a zigzag (while X is below 1,192.44), flat or triangle, and must end at 1,165.76 or below.
Weekly Chart: Overall volume still favours a downwards breakout eventually. During this sideways movement, it is still down days and a down week which have higher volume. On Balance Volume breaches a trend line (lilac line) which began in December 2013, and the breach is significant.
While price has made higher lows, On Balance Volume has made lower lows (green trend lines). This small rise in price is not supported by volume, and it is suspicious.
Daily Chart: ADX remains very low and declining. ADX is very clear: there is no trend. The market remains range bound, and a range trading system is best employed as opposed to a trend following system. Trading range bound markets is inherently more risky than trading a trending market. It is essential that good money management techniques are employed to avoid wiping out your account in this type of market. A good rule to follow may be to risk no more than 2% of equity in any one trade.
The last five days sees volume declining while price moves sideways. This looks like a typical correction. The sloping blue trend line is no longer providing resistance.
The range bound system illustrated here uses horizontal lines of support and resistance with fast Stochastics to indicate the end of each swing. However, price can move substantially above and below the horizontal lines at the end of each swing and this illustrates the risk involved in trading this market. It is impossible to tell exactly where and when each swing ends and the next one begins.
This approach now expects an upwards swing from here to end only when price finds resistance at the upper horizontal lines and Stochastics is again overbought.
This analysis is published about 05:04 p.m. EST.