The main wave count was invalidated with a new high above 1,119.56.
The alternate was confirmed, which expected more upwards movement.
Summary: The structure is still incomplete. The structure is still seen as a fourth wave correction, and expected to end about 1,131 or 1,142. These price points previously provided support; now they may provide resistance. A new low below 1,105.18, at this stage, would be strong indication that the correction is over, that price is breaking out downwards. A breakout would only be confirmed with a red daily candlestick coming on increased volume. Until that is seen, we must accept more upwards movement is likely, and so the correction is not over.
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Changes to last analysis are bold.
ELLIOTT WAVE COUNT
Cycle wave a is an incomplete impulse.
Within primary wave 5, the daily chart focuses on the middle of intermediate wave (3). Within intermediate wave (3), minor wave 3 now shows a slight increase in momentum beyond that seen for the end of minor wave 1 at the left of the chart. Third waves for Gold usually have clearly stronger momentum than its first waves, so I still expect to see a further increase in downwards momentum. The strongest downwards movement is still ahead of us, and now it may be expected to show up within the next fifth wave down of minute wave v to end minor wave 3. Gold often exhibits very strong fifth waves, and when it does this they usually turn up to end its third wave impulses.
It is possible (just, with an unusual looking expanded flat within it for a second wave) to see minute wave iii as over. The duration of this current correction indicates that despite the problem within its subdivisions minute wave iii must have been over and this current correction is minute wave iv.
Minute wave ii was a deep 0.618 single zigzag lasting nine days. Minute wave iv is a more shallow flat correction, which is still incomplete. Within minute wave iv, minuette wave (c) is a five wave impulse, and its fourth wave yet to show up may not move into its first wave price territory below 1,105.18.
Minute wave iv may not move into minute wave i price territory above 1,162.80.
The blue channel is a base channel drawn about minor waves 1 and 2: draw the first trend line from the start of minor wave 1 (off to the left of the chart at the high of 1,308) to the end of minor wave 2, then place a parallel copy on the end of minor wave 1. The lower trend line perfectly shows where minute wave iii found support. Minor wave 3 should have the power to break through support at the lower trend line; when its fifth wave arrives, then it should be strong enough to do that.
There is no Fibonacci ratio between minute waves i and iii, which makes it very likely that minute wave v will exhibit a Fibonacci ratio to either of minute waves i or iii. When minute wave iv is confirmed as complete, then a target for minute wave v down may be calculated. It is likely to be extended and very strong.
Along the way down to the final target for primary wave 5 at 954, there will be two more big fourth wave corrections: one for minor wave 4 and another for intermediate wave (4). They may be expected to be less time consuming than their counterpart second wave corrections; they may also be expected to be shallow, but they will both still likely be multi week corrections (at least two weeks in the case of minor wave 4 and longer for intermediate wave (4) ).
At 957 primary wave 5 would reach equality in length with primary wave 1.
This two hourly chart shows the whole structure of this fourth wave correction.
I have considered various possible structures for minute wave iv and eliminated all except for a flat correction.
Minute wave iv is very unlikely to be a single or multiple zigzag, because that would not provide structural alternation with minute wave ii which was a single deep 0.618 zigzag.
Minute wave iv is clearly not a triangle; that idea was invalidated days ago.
Minute wave iv is no longer likely to be a combination, because the second structure in the double now ends well above the end of what would be the first. Double combinations move price sideways, but this correction has a clear slope against the prior trend.
That leaves the only possibility of a flat correction. Within this flat correction, minuette waves (a) and (b) both subdivide well as three wave corrections on the hourly chart. The only low for minuette wave (b) is as labelled because only there is it more than 90% of minuette wave (a).
I have also considered the possibility that minute wave iii ended with a truncated fifth wave at the low labelled minuette wave (b). That idea is invalid, because the final fifth wave for the truncation absolutely will not subdivide as a five. The final fifth wave fits neither as an ending diagonal nor as an impulse, although it does have a cursory look as a five; the problem there is that what would be the third wave would be the shortest, violating a core Elliott wave rule.
Minuette wave (c) would reach 1.618 the length of minuette wave (a) at 1,150. If this target is reached, then price first has to break through strong resistance at 1,131. This would see little alternation in depth between minute waves ii and iv. Minute wave ii was 0.618 of minute wave i, and at 1,150 minute wave iv would be 0.58 of minute wave iii. This target is entirely possible, and it must be accepted today that it is possible, but it is unlikely due to the guideline of alternation.
When subminuette wave iv arrives, then it may be quick and shallow. It may not move into subminuette wave i price territory below 1,105.18.
The upwards movement for Wednesday will not subdivide as a complete five wave impulse. To try and see a complete five wave impulse would have the third wave as the shortest, violating a core Elliott wave rule. Sideways movement to end Wednesday’s session fits as a small triangle indicating a fourth wave and more upwards movement. Because the middle of the third wave within the impulse of minuette wave (c) is still incomplete, more upwards movement should be expected.
Draw a best fit channel about subminuette wave iii. Along the way up, corrections should find support at the lower edge or possibly about a mid line. Submicro wave (4) should be the next correction to unfold, and may not move into submicro wave (1) price territory below 1,112.69.
Eventually a new low below 1,105.18 would be early price indication of a breakout. At that stage, downwards movement may not be subminuette wave iv, so subminuette wave iv and minuette wave (c) in its entirety would then be likely to be over.
The next thing to look for is confirmation of a downwards breakout with a red daily candlestick on increased volume.
This fourth wave is close to maturity, but the structure is still incomplete.
ADX is below 45 and clearly declining. A correction is likely. This is what has been unfolding now for over two weeks; ADX does tend to be a lagging indicator. However, at this stage, what ADX clearly shows today is that this upwards movement is not a new trend.
On Balance Volume has breached its long held lilac trend line, a very bullish indicator which is at odds with ADX. This now gives a mixed message about where price may be expected to go next.
I have added two horizontal trend lines of resistance, which were previously support. The first is at 1,131 from that low on 7th November 2014. The second is at 1,142 from the lows at 1st December 2014 and 17th March 2015. If price breaks above 1,131, then the next line at 1,142 may show where upwards movement ends. 1,142 was tested four times, so it is highly technically significant.
RSI has returned well into normal range. There is plenty of room for the market to rise or fall.
The EMA is changed to a Fibonacci 55 days. This may also provide some resistance.
Note: It is extremely disappointing to see volume data has again changed. Up to 6th August, volume during this correction was strongest for the down day of 23rd July. On 7th August, volume data for that day changed: volume was strongest for the downwards day of 30th July. Now data has changed a third time: a downwards day is no longer showing strongest volume. This makes volume analysis, which is vital to technical analysis, impossible to do with any reliability. I do not trust this volume data anymore, so today I’ll be looking for another data feed.
This analysis is published about 07:34 p.m. EST.