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Sideways movement to complete a small real body for Tuesday’s candlestick fits the Elliott wave count nicely.

Summary: This fourth wave correction may continue for at least another one day to last a total Fibonacci three days. Choppy overlapping sideways movement is expected as very likely. If it does not end in three days total, then the next Fibonacci numbers in the sequence of five and eight would be expected for the duration. Targets are either the 0.236 Fibonacci ratio at 1,108 or 0.382 Fibonacci ratio at 1,122. If it takes long enough, it may find resistance at the upper edge of the Elliott channel drawn on both daily and hourly charts.

To see weekly charts click here.

New updates to this analysis are in bold.


Gold Elliott Wave Chart Daily 2015
Click chart to enlarge.

Gold has been in a bear market since September 2011. There has not yet been confirmation of a change from bear to bull. Price remains below the 200 day moving average and below the final bear market trend line (copied over from the weekly chart). The bear market should be expected to be intact until we have technical confirmation of a big trend change. At this stage, all bull wave counts have been invalidated. This is the only wave count left.

The final line of resistance (bright aqua blue line copied over from weekly charts) is only overshot and not so far properly breached. While this line is not breached the bear wave count will remain possible. Simple is best, and the simplest method to confirm a trend change is a trend line.

Minute wave ii is a complete double zigzag and deep at 0.75 the length of minute wave i. It has breached the dark blue base channel drawn about minor waves 1 and 2, one degree higher. When a lower degree second wave correction does this it reduces the probability of the wave count but does not invalidate it. Base channels most often work to show where following corrections find support or resistance, but not always.

At 932 minute wave iii would reach 1.618 the length of minute wave i.

Gold often exhibits swift strong fifth waves, particularly its fifth waves within its third waves. When price moves towards subminuette wave v of minuette wave (iii) it may be explosive. For this wave count look out for surprises to be to the downside.

At 1,080 minuette wave (iii) would reach 4.236 the length of minuette wave (i).

Draw a channel about this downwards movement using Elliott’s first technique: draw the first trend line from the end of minuette wave (i) to the last low which may be minuette wave (iii), then place a parallel copy on the high of minuette wave (ii). Minuette wave (iv) may find resistance at the upper edge of the channel.

Minuette wave (iv) may not move into minuette wave (i) price territory above 1,167.49.


Gold Elliott Wave Chart Hourly 2015
Click chart to enlarge.

I have two hourly wave counts today. I will favour neither. At this stage, it is not possible to tell with certainty what structure minuette wave (iv) will complete as.

Minuette wave (ii) was a deep 0.65 expanded flat lasting six days. Minuette wave (iv) may be shallow, most likely ending at either the 0.236 or 0.382 Fibonacci ratios. It would most likely be a zigzag or triangle.

It may be quicker than minuette wave (ii) due to the strong downwards pull of minuette wave (v) to come, and may last most likely a Fibonacci three days and possibly (less likely) a Fibonacci five. It is also possible (but even less likely) that it may last a Fibonacci eight days.

This first hourly wave count expects minuette wave (iv) to be longer lasting, maybe a Fibonacci five or eight days in total. This chart looks at how a combination may unfold sideways.

The first structure in the combination may be a regular flat labelled subminuette wave w. At 1,102 micro wave C would reach 1.618 the length of micro wave A.

A three down for subminuette wave x may unfold when subminuette wave w is complete. It may make a new low below the price extreme of subminuette wave w. There is no downwards invalidation point for this wave count.

Thereafter, another corrective structure, most likely a zigzag, may unfold upwards to end about the same level as subminuette wave w so the whole structure moves sideways.

Minuette wave (iv) may not move into minuette wave (i) price territory above 1,167.49.

If minuette wave (iv) were to unfold as a flat correction, the expected pathway would be mostly the same as this chart depicts. I am not labelling that possibility though because it has the lowest probability; minuette wave (iv) is unlikely to be the same structure as minuette wave (ii).


Gold Elliott Wave Chart Hourly 2015
Click chart to enlarge.

I expect this chart (although is labelled “alternate”) has a close to even probability with the first hourly chart. I will favour neither.

Minuette wave (iv) may be unfolding as a running contracting triangle. Within the triangle, subminuette wave c may not move beyond the end of subminuette wave a above 1,095.89.

This triangle may continue sideways in an ever decreasing range for another one or possibly even two days. At this stage, this idea sees minuette wave (iv) maybe coming to a swifter end than the first hourly wave count.

If price moves sideways and remains below 1,095.89, and if MACD hovers about the zero line, then this wave count would increase in probability.

Minuette wave (v) downwards is expected to show a strong increase in momentum beyond that seen so far. Expect surprises to be to the downside.


Gold Chart Daily 2015
Click chart to enlarge. Chart courtesy of

Daily: Volume is only slightly higher than the prior day which had relatively low volume. This looks corrective. The small real body with even upper and lower shadows for Tuesday’s candlestick also looks corrective. This fits the Elliott wave count.

ADX still indicates a downwards trend is in place. Today ATR is beginning to disagree. Price range is smaller. ATR has a new low short term.

If price manages to get up that high during this small correction, then it may find resistance at the lower horizontal trend line. Resistance should be found at the 9 day EMA prior to that though.

On Balance Volume may assist to indicate when the correction will end. If OBV comes up to touch the new green trend line, then at that time the correction may be complete. OBV should find resistance at that line.

This analysis is published about 07:30 p.m. EST.