Upwards movement was expected. The first target was reached.
Today’s Elliott wave analysis will focus on: identifying if this structure is complete, and looking at what price point would provide first confirmation.
Summary: Upwards movement is most likely incomplete. The second target at 1,141 should now be met within 24 hours. A new low below 1,120.27 now would provide earliest confirmation that minute wave iv is finally over. A downwards breakout would be finally confirmed with a red daily candlestick on higher volume.
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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.
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.
Upwards movement invalidated the unlikely alternate hourly wave count; this main wave count was confirmed. The first target has been met, but the structure is incomplete so now the second target will be used.
At 1,141 subminuette wave v would reach equality in length with subminuette wave i.
Subminuette wave v must subdivide as either an impulse or an ending diagonal. At this stage, we can tell subminuette wave v is subdividing as a simple impulse, and within it the third wave may not be complete.
When micro wave 4 arrives, then it may not move into micro wave 1 price territory. This is the lowest point for micro wave 1 to possibly be over. Micro wave 4 may not move below 1,120.27.
Draw a channel about subminuette wave v: draw the first trend line from the end of micro wave 1 to the last high, and as micro wave 3 ends redraw the first trend line to its end, then place a parallel copy on the low of minuscule wave 4 in order for the channel to contain all this movement. While subminuette wave v is still unfolding the lower edge of the channel should provide support. When that lower trend line is fully breached by downwards (not sideways) movement, then that may be earliest indication that subminuette wave v may be over.
A new low below 1,120.27 could not be a fourth wave correction within subminuette wave v, so at that stage subminuette wave v would have to be over. A new low below 1,120.27 would therefore provide earliest price confirmation that minute wave iv in its entirety should finally be over.
Depending upon your risk appetite, you may want to wait for traditional technical confirmation with a red daily candlestick on increased volume before you have confidence in a downwards breakout.
The next wave down for minute wave v is expected to be very strong, extended, and maybe quick. This is typical of Gold and commodities for fifth waves, particularly a fifth wave within a third wave impulse.
Click chart to enlarge. Chart courtesy of StockCharts.com.
Overall, during this upwards price movement, volume is declining. Although volume showed some increase today, it is still lower than prior days during this correction. Overall the rise in price is not supported by volume. This supports the Elliott wave count, which sees this movement as a correction.
However, during this correction, it is still clearly upwards days which have strongest volume. This would indicate that an upwards breakout is more likely than downwards, which does not support the Elliott wave count.
ADX remains very clear: the market is consolidating not trending. ADX supports the Elliott wave count in expecting this upwards movement is a correction and not a new trend.
Upwards movement may end when price touches the bright green horizontal trend line at 1,142, which should provide resistance. That horizontal line has been tested three times for support, and should now provide strong resistance.
On Balance Volume may assist to show when and where this upwards movement ends. When OBV comes up to touch the trend line drawn there, then upwards movement may end.
RSI is back into normal range. There is plenty of room for the market to either fall or rise.
Fast Stochastics is again comfortably overbought. This indicates an end to upwards movement either now or very soon, which also supports the Elliott wave count.
This analysis is published about 07:57 p.m. EST.