A small correction unfolded more quickly than expected.
This was followed by upwards movement.
Summary: The trend is up. In the short term, price should find support at the orange trend line on the hourly chart. Expect further upwards movement while price remains above that line. A break below the orange line and a new low below 1,176.9 would indicate a multi day correction may have arrived.
New updates to this analysis are in bold.
MAIN BULL 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 yet be ahead. Gold typically exhibits swift strong fifth waves to end its third wave impulses. Look out for surprises to the upside for one or more of subminuette wave v, minuette wave (v), minute wave v, and minor wave 5.
At 1,227 minor wave 3 would reach 4.236 the length of minor wave 1. If this target is wrong, it may not be high enough. Minor wave 3 may not exhibit a Fibonacci ratio to minor wave 1.
Within minor wave 3, minute waves i and ii are complete. Minute wave iii is incomplete.
Within minute wave iii, minuette waves (i) and (ii) are complete. Minuette wave (iii) may still be incomplete (main hourly wave count) or it may today possibly be complete (alternate hourly wave count). At 1,212 it would reach 2.618 the length of minuette wave (i).
Minuette wave (ii) was a time consuming and deep double zigzag which lasted 4 sessions. When minuette wave (iii) is complete, then the following correction for minuette wave (iv) should also be a multi day correction showing up clearly on the daily chart. This would be the next expected multi day interruption to the trend.
Within minuette wave (iii), subminuette waves i, ii and now also iii are all complete. There is no Fibonacci ratio between subminuette waves i and iii.
Ratios within subminuette wave iii are: micro wave 3 is 4.69 short of 2.618 the length of micro wave 1, and micro wave 5 is 2.63 longer than equality in length with micro wave 1.
Subminuette wave iv was over within one session, lasting just 12 hours and very shallow. This is a typical tendency of Gold when fifth waves are swift and strong. When this happens fourth wave corrections are forced to be more brief and shallow, giving an impulse a slightly three wave look and ending with a sharp spike. Look out for this tendency again as minor wave 3 comes to an end in the next couple of weeks or so.
MAIN HOURLY WAVE COUNT
Subminuette wave iv was a quick shallow zigzag. There is no alternation in structure between subminuette waves ii and iv, both are zigzags, but there is alternation in depth: subminuette wave ii was relatively deep at 0.56 and subminuette wave iv is very shallow at 0.11. This is entirely acceptable as it is typical behaviour for Gold when its fifth waves are swift and strong.
The structure may be incomplete within subminuette wave v.
There is no Fibonacci ratio between micro waves 3 and 1.
Ratios within micro wave 3 are: submicro wave (3) is 1.51 longer than 1.618 the length of submicro wave (1), and submicro wave (5) is 0.69 longer than 0.382 the length of submicro wave (3).
Micro wave 2 was a quick shallow 0.41 zigzag. Micro wave 4 would most likely be a flat, combination or triangle. It should find support at the orange trend line which is drawn across the two lows of the last two sessions. It may end about the 0.618 Fibonacci ratio at 1,183.
Micro wave 4 may not move into micro wave 1 price territory below 1,176.9.
The target for minuette wave (iii) remains the same. At 1,212 it would reach 2.618 the length of minuette wave (i).
ALTERNATE HOURLY WAVE COUNT
It is possible today that minuette wave (iii) is over. It would be 11.36 short of 2.618 the length of minuette wave (i). This is a reasonably large amount but still less than 10% the length of minuette wave (iii).
Ratios within minuette wave (iii) are: there is no Fibonacci ratio between subminuette waves i and iii, and subminuette wave v is 1.42 longer than 0.382 the length of subminuette wave iii.
There are no Fibonacci ratios between micro waves 1, 3 and 5 within subminuette wave v.
Minuette wave (iv) should exhibit alternation with minuette wave (ii). Minuette wave (ii) was a deep 0.76 double zigzag lasting four sessions. Minuette wave (iv) should be shallow. It is most likely to be a flat, combination or triangle. These structures tend to be more time consuming than zigzags.
There are two competing tendencies regarding the duration of minuette wave (iv). It may be forced to be more brief and shallow than otherwise, if the following fifth wave of minuette wave (v) is to be a typically swift strong fifth wave. But it may be longer lasting than minuette wave (ii) because sideways corrections tend to be quicker than zigzags.
At this stage, it is impossible to say how long it would last. It should be expected to last at least one session, and most likely a Fibonacci three or five.
Minuette wvae (iv) may end within the price territory of the fourth wave of one lesser degree. Subminuette wave iv has its price territory from 1,174 to 1,164.
If minuette wave (iv) is a little deeper, it may end about the 0.382 Fibonacci ratio at 1,151.
Minuette wave (iv) may not move into minuette wave (i) price territory below 1,112.19.
If this alternate hourly wave count is confirmed, then draw an Elliott channel about this movement on the hourly chart on an arithmetic scale. Draw the first trend line from the ends of minuette waves (i) to (iii) then place a parallel copy on the low of minuette wave (ii). Minuette wave (iv) may find support about the lower edge of this channel.
Click chart to enlarge. Chart courtesy of StockCharts.com.
Upwards movement for the last several days comes with an increase in volume. The rise in price was supported by volume.
ADX still indicates there is a trend and it is up. ATR agrees that this market is trending.
Corrections should be expected to find support about the 9 day exponential moving average.
On Balance Volume has come up to touch the dark blue trend line. This may force price to stop here and a correction to unfold about here.
RSI is overbought, but this indicator can remain extreme for some time in a trending market. It does not exhibit any divergence with price, so it is not indicating today that a correction should unfold here.
Slow Stochastics may be more useful than fast. There is no divergence today between price and Stochastics, so a correction is not indicated today.
On balance I would give more weight to On Balance Volume in today’s analysis. It is somewhat likely that price may move lower for a day to a few days for a correction against the upwards trend.
This analysis is published @ 06:28 p.m. EST.