Upwards movement has unfolded exactly as expected.
Summary: The first target for this upwards move to end is at 1,295. If price gets there and the structure is incomplete, or if price just keeps rising through the first target, then the next target is at 1,338. We have both trend channel and price confirmation above 1,260.93 that the last wave down is complete.
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.
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.
There is perfect alternation between the deep double zigzag of minor wave 2 and the very shallow 0.23 expanded flat correction of minor wave 4.
Minor wave 4 is within the price territory of one lesser degree. Minute wave iv has its range from 1,261.94 to 1,190.9.
Upwards movement has confirmed that the last wave down within minor wave 4 is complete. The probability that minor wave 4 in its entirety is complete is high. Within minor wave 5, no second wave correction may move beyond the start of its first wave below 1,225.95.
Minor wave 1 lasted one day. Minor wave 2 lasted nine days (one longer than a Fibonacci eight). Minor wave 3 lasted fifty four days (one short of a Fibonacci fifty five). Minor wave 4 lasted seven days (one short of a Fibonacci eight).
At this stage, minor wave 5 may be expected to last either a Fibonacci five or eight days. It may be swift and strong but not necessarily extended. It is very likely to end with a strong upwards day on a volume spike.
HOURLY ELLIOTT WAVE COUNT
It is very likely that minor wave 4 is over because the wave count has the right look with good proportions at the daily chart level. If it were to continue further as a double flat, it may begin to be out of proportion.
If minor wave 4 has ended here, then at 1,295 minor wave 5 would reach 1.618 the length of minor wave 1. If price keeps going up through this first target, or when it gets there the structure of minor wave 5 is incomplete, then the next target is the next Fibonacci ratio in the sequence. At 1,338 minor wave 5 would reach 2.618 the length of minor wave 1.
Minor wave 5 must subdivide as a five wave structure. So far within it the first five up of minute wave i is incomplete.
There is no Fibonacci ratio between minuette waves (i) and (iii) within minute wave i. This makes it more likely that minuette wave (v) will exhibit a Fibonacci ratio to either of minuette waves (i) or (iii). It would most likely be equal in length with minuette wave (i) at 11.31.
Minuette wave (ii) was a very deep 0.98 double zigzag. The time consuming part of the correction was a regular contracting triangle for subminuette wave x.
Minuette wave (iv) would most likely be very shallow; the 0.236 Fibonacci ratio at 1,255 is a reasonable target. It may not move into minuette wave (i) price territory below 1,237.9. Minuette wave (iv) may not be as time consuming as minuette wave (ii), and it should not show up on the daily chart as a red candlestick although it may show as a doji. It should be over within the next 24 hours. When minuette wave (iv) is complete, then a target may be calculated for minuette wave (v) upwards to complete the impulse of minute wave i. Because I don’t know where minuette wave (v) starts today this cannot be done yet.
If I am wrong, then minor wave 4 could be continuing sideways as a double flat or combination. This is possible, but the proportions of minor waves 2 and 4 on the daily chart look to be right as I have it labelled today. A continuation of minor wave 4 is an outside possibility; in my judgement, it has a very low probability. I do not want to give this idea too much weight by publishing it as a chart. I will publish an alternate only if this wave count is proven wrong by invalidation below 1,237.9.
Click chart to enlarge. Chart courtesy of StockCharts.com.
A strong upwards day coming with an increase in volume supports the Elliott wave count which expects an upwards breakout. Price has not yet broken above the upper edge of this current consolidation zone. A break above the upper edge of this zone now delineated by green trend lines, on a day with increased volume, would be an upwards breakout. Likewise, a break below the lower edge on a day with higher volume would be a downwards breakout.
During this current consolidation it remains an upwards day with higher volume. This supports the Elliott wave count and indicates an upwards breakout is more likely than downwards. Volume tends to be a fairly reliable indicator of breakout direction for Gold.
ADX is today flat not indicating the market is trending yet. The +DX line remains above the -DX line, so a trend if it resumes would still be up.
ATR is today increasing, and has overall been increasing for about five days. This indicates the market is trending.
On Balance Volume found support at the short orange trend line. The strength of this line is reinforced, and it now has some reasonable technical significance. OBV may find some resistance at the green line, but this does not have much technical significance. The dark blue line has more significance. A break above that line would be a strong bullish signal. If OBV cannot break above that line, that would be a reasonable bearish signal.
Neither RSI nor Stochastics are extreme. Neither show divergence. There is room for this market to rise or fall.
This analysis is published @ 07:09 p.m. EST.