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The Elliott wave count as updated in yesterday’s analysis is unfolding mostly as expected.

Summary: The structure for minute wave iv is still incomplete. Minute wave iv still needs one final fifth wave up to end it, and a target is now calculated at 1,134 which sees price reach up into the zone of resistance between 1,131 and 1,142. If subminuette wave iv continues sideways or lower, then this target must be recalculated; the invalidation point remains at 1,105.18. If minute wave iv continues for three more days, then it may total a Fibonacci 21 days (to give or take one either side of this number would be an acceptable Fibonacci relationship). The bigger trend remains down; this current movement is still a correction against the trend. Only a break below 1,105.18 plus a red daily candlestick on higher volume would tell us a downwards breakout is underway.

To see weekly charts and analysis click here.

Changes to last analysis are bold.


Gold Elliott Wave Chart Daily 2015
Click chart to enlarge.

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.

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.

Gold Elliott Wave Chart Hourly 2015
Click chart to enlarge.

Within the flat correction of minute wave iv, minuette waves (a) and (b) both subdivide as three wave structures, and minuette wave (b) is a 97% correction of minuette wave (a) meeting the minimum requirement of 90% for a B wave within a flat. Minuette wave (c) may only be a five wave structure, and at this stage, it looks like an incomplete impulse.

Within the impulse, subminuette wave iv may not move into subminuette wave i price territory below 1,105.18.

Subminuette wave ii was a time consuming double combination. Subminuette wave iv may exhibit alternation as a quicker zigzag or zigzag multiple, or less likely a flat or triangle. It is possible that it is over already lasting just one day and subdividing as a zigzag, but it is also possible it may continue for another day or so to take more time and be better in proportion to subminuette wave ii. So far it shows up on the daily chart as one red candlestick. If it continues further, then it may not move into subminuette wave i price territory below 1,105.18.

If subminuette wave iv is already over, then at 1,134 subminuette wave v would reach 0.618 the length of subminuette wave i. If it moves lower, then this target must be recalculated.

If the lower invalidation point is breached (before new highs), then my analysis is likely to be wrong at the hourly chart level; it is possible that minute wave iv would be over. Only a red candlestick on the daily chart with an increase in volume would confirm a downwards breakout.


Gold Chart Daily 2015
Click chart to enlarge.

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.

Volume for the two days (indicated with black arrows) has been changed retrospectively. Previously these two downwards days showed higher volume than upwards days, which indicated a downwards breakout as more likely than upwards. This is no longer the case; this changed volume profile can be seen on separate data feeds, so should now be correct.

Overall, within this correction, it is upwards days now which have stronger volume, which would indicate an upwards breakout is more likely than downwards. However, this disagrees with ADX, which indicates the market is consolidating and not in a new upwards trend. While these two indicators give opposite messages, the picture is unclear; caution is advised.

The strongest piece of technical analysis on this chart is the horizontal lines of resistance, particularly 1,142. At this stage, it should be expected that price will respect that trend line.

Note: I am still searching for a reliable new data feed for Gold spot prices. I will use volume data from IG brokers to supplement this data from FXCM. Today both data feeds show volume for Thursday’s downwards day was lower than the prior upwards days.

This analysis is published about 06:34 p.m. EST.