Downwards movement was expected for Friday’s session.
Summary: The target remains at 1,224. The target may be met in one or two more sessions.
New updates to this analysis are in bold.
Last published weekly chart is here.
DAILY ELLIOTT WAVE COUNT
Gold has very likely changed from bear to bull.
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 often exhibits swift strong fifth waves typical of commodities. Minor wave 5 may be strong and may end with a sharp upwards day on a volume spike.
Ratios within minor wave 3 are: there is no Fibonacci ratio between minute waves iii and i, and minute wave v is just 0.07 short of 1.618 the length of minute wave i.
Minor wave 2 was a very deep 0.97 double zigzag lasting nine days (one more than a Fibonacci eight). Given the guideline of alternation, minor wave 4 may be expected to be a longer lasting sideways structure such as a flat, combination or triangle. At this stage, minor wave 4 may be unfolding as a flat correction which may end in a Fibonacci eight days. If it is a combination, it may continue for longer, perhaps to total a Fibonacci thirteen days.
Minor wave 4 may end within the price territory of one lesser degree. Minute wave iv has its range from 1,261.94 to 1,190.9.
Minor wave 4 may not move into minor wave 1 price territory below 1,088.79.
Although the alternate wave count was not invalidated by price, the strong downwards day of Friday has reduced the probability substantially. It is my judgement that the probability is now too low for publication.
HOURLY ELLIOTT WAVE COUNT
There are still at least two structural possibilities for minor wave 4. It looks at this stage to most likely be a regular flat correction. Within the flat, minute wave a subdivides as a three, minute wave b is a complete three, and minute wave c downwards must complete as a five. Minute wave b is a 1.09 length to minute wave a, so this would be an expanded flat. The most common ratio for minute wave c would be 1.618 the length of minute wave a which would be reached at 1,224.
Within minute wave c, minuette waves (i) to (iii) may be complete. This labelling expects minuette wave (v) to be extended which is typical of commodities.
There is no Fibonacci ratio between minuette waves (i) and (iii). This makes it more likely that minuette wave (v) would exhibit a Fibonacci ratio to minuette wave (i). The most likely ratios would be equality at 13 in length, or 1.618 at 21 in length.
Within minute wave c, the correction for minuette wave (iv) may find resistance at the upper edge of the best fit channel. It may not move into minuette wave (i) price territory above 1,269.61.
Minor wave 4 may also be unfolding as a double combination. The first structure in the double was an expanded flat labelled minute wave w. The double is joined by a three in the opposite direction, an expanded flat labelled minute wave x. The second structure would most likely be a zigzag labelled minute wave y. It may also be a triangle or a flat correction for a double flat. If minute wave y is a triangle or flat correction, then it may be a more time consuming sideways movement that could continue for a further eight days for minor wave 4 to total a Fibonacci thirteen daily candlesticks.
At this stage, it does not look like minor wave 4 is unfolding as a triangle. The downwards movement to the low labelled minuette wave (b) would have to be the end of the A wave of a triangle and this does not fit well as a double or single zigzag.
Click chart to enlarge. Chart courtesy of StockCharts.com.
Since the beginning of this current consolidation from the first day on 7th March, it is an upwards day which has strongest volume. This indicates an upwards breakout is more likely than downwards.
The downwards day of 11th March comes with lighter volume than the prior day. The fall in price was not supported by volume.
Price may find support at the green trend lines which delineated the triangle structure.
ADX is slightly increasing, so the market may again be trending and the trend would be up. ATR also is increasing indicating the market is likely trending again.
On Balance Volume has come to find support at the dark blue trend line. This may assist to hold up price here. If OBV breaks below this line, the next line is the short term orange line, but this does not offer much technical significance.
RSI has returned from oversold as has Stochastics slightly.
This analysis is published @ 11:49 p.m. EST.