Upwards movement was not expected for Thursday’s session.
Summary: The trend is up. Another shallow brief fourth wave should continue for one or three days. It may end about 1,214 or 1,184.
New updates to this analysis are in bold.
DAILY ELLIOTT WAVE COUNT
A new high above 1,191.37 has invalidated the bear wave count and confirmed that Gold is now in a bull market.
Super Cycle wave (b) may be any one of 23 possible corrective structures. First, a move of this size should have a clear five up on the daily and weekly charts. That is still to complete.
So far, within the first five up, the middle of the third wave is now most likely complete. The strongest move may still be ahead. Gold typically exhibits swift strong fifth waves to end its third wave impulses. Look out for surprises to the upside for minute wave v and minor wave 5.
When minute wave iv is complete, then a target will again be calculated for minor wave 3 to end.
Minute waves i, ii and now iii are most likely complete within minor wave 3.
The fourth wave corrections are so far more brief and shallow than expected within this impulse unfolding upwards. This pattern may continue, which is why I say look out for surprises to the upside. Gold typically exhibits swift strong fifth waves to end its third wave impulses, and this often forces the fourth wave corrections which unfold right before to be over more quickly and be very shallow. It gives Gold’s impulses a curved look at a higher time frame.
The pink channel is a best fit. Draw the first trend line from the highs labeled minute waves i to iii then place a parallel copy lower to contain the whole upwards wave. Minute wave iv should find strong support at the lower edge if it gets that low.
Minute wave ii was a deep 0.68 zigzag. Minute wave iv should be shallow and may be a flat, combination or triangle most likely. Minute wave ii lasted 7 days. Minute wave iv may be over in a Fibonacci 3 or 5 days.
HOURLY WAVE COUNT
Minute wave iii has no Fibonacci ratio to minute wave i.
Ratios within minute wave iii are: minuette wave (iii) is 11.47 short of 2.618 the length of minuette wave (i) and minuette wave (v) 0.37 longer than 0.618 the length of minuette wave (iii).
Ratios within minuette wave (v) are: subminuette wave iii has no Fibonacci ratio to subminuette wave i, and subminuette wave v is 1.70 short of 2.618 the length of subminuette wave i.
The structure of minuette wave (v) is very likely to be over. The alternate below looks at the possibility that it is not. This main wave count has a higher probability.
Initially minute wave iv may find some support at the cyan trend line. It is likely to then break through support there. A breach of that line would provide confidence that a multi day correction should be underway.
When minute wave iv may possibly be a complete structure, even if it looks to be brief, then it may be over.
It should be shallow to exhibit alternation with minute wave ii, so the 0.236 Fibonacci ratio at 1,214 and the 0.382 Fibonacci ratio at 1,184 would be reasonable targets.
The 0.382 Fibonacci ratio would see minute wave iv end within the price territory of the fourth wave of one lesser degree which is from 1,200.67 to 1,181.66.
ALTERNATE HOURLY WAVE COUNT
It is my judgement that this alternate has a lower probability. Gold often ends third wave impulses with a swift sharp spike, so the main hourly wave count should be expected to have a higher probability.
If price does not manage to break below the cyan trend line and it turns up to make a new high, then a reasonable target for minute wave iii would be at 1,269 where minuette wave (v) would reach 1.618 the length of minuette wave (i).
Within minuette wave (v), the fourth wave correction of subminuette wave iv may not move into subminuette wave i price territory below 1,193.33. Unfortunately, this price point may not be a useful confirmation point for the main hourly wave count. The cyan line should be used instead to differentiate between the two counts.
Click chart to enlarge. Chart courtesy of StockCharts.com.
A strong upwards day with a strong spike in volume looks like a typical blowoff top for Gold. A correction should be expected as very likely from here.
There is no divergence with price and RSI, but that is not always seen at the end of a trend. RSI has been extreme now for six days. This indicates a correction will come.
ADX and ATR strongly agree that there is a trend and it is up. Downwards movement should be expected as a correction against the trend and taken as an opportunity to join the trend.
On Balance Volume has now broken above the final line of resistance. This may offer a little support. If it is breached, the green line may offer support.
There is divergence today with the strong new high from price and Stochastics. This supports the idea of a correction to unfold about here.
This analysis is published @ 08:18 p.m. EST.