Select Page

One final wave down was expected to finish the correction, but this did not happen.

A new high above 1,248.44 confirmed the correction was over and price was breaking out upwards.

Summary: The target is at 1,280 in the first instance. Thereafter, if price keeps rising, the next target is at 1,350.

New updates to this analysis are in bold.

Last published weekly chart is here.


Gold Elliott Wave Chart Daily 2016
Click chart to enlarge.

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 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.

Minute waves i, ii and now iii are complete within minor wave 3.

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 may find support at the lower pink line. If price touches that line, it should offer a low risk entry point to join the upwards trend. Price touched that line three times in the last week.

A triangle is complete for minute wave iv. Minute wave v of minor wave 3 is underway and the structure is incomplete.

There are two competing tendencies for this fifth wave. It is a fifth wave to follow a fourth wave triangle and the fifth wave can be surprisingly short. It is also a fifth wave to end a third wave impulse, and the fifth wave can be long strong extensions. Multiple targets should be used to allow for both tendencies. A channel may be used to confirm when it is over, but structure at the hourly chart level will also be important.

Now that price has broken above the lilac trend line, if price turns down, it should find support there. A typical throwback to that line would offer a low risk entry opportunity to join the trend.

Extend the triangle trend lines outwards. The point in time at which they intersect often sees a trend change, which would be 9th March. This does not always work, but it works often enough to be something to look out for. This does not have to be the end of minor wave 3 (although it may be). It could be the end of minute wave a within minor wave 4, or the end of a smaller correction within minor wave 3.

Within minute wave v, no second wave correction may move beyond its start below 1,224.78.


Gold Elliott Wave Chart Hourly 2016
Click chart to enlarge.

The triangle for minute wave iv is complete. The final wave down of minuette wave (e) looks like a five, not a three.

So far within minute wave v the structure is incomplete. Minuette wave (iii) is just 0.42 short of 1.618 the length of minuette wave (i). Minuette wave (iii) shows stronger momentum than minuette wave (i).

I have noticed that volume spikes on the hourly chart in the middle of third waves, which fits the personality of third waves neatly. Volume declines at fifth waves. The volume profile at the hourly chart level fits this wave count perfectly.

Minuette wave (iv) may not move into minuette wave (i) price territory below 1,243.95.

The green channel is a best fit. Minuette wave (iv) may not move low enough to find support at the lower edge. It may end within the price territory of the fourth wave of one lesser degree, between 1,259.66 to 1,253.53.

When minuette wave (iv) is complete, then minuette wave (v) upwards should make a new high above minuette wave (iii) at 1,268.06 to avoid a truncation. Minuette wave (v) is most likely to exhibit equality in length with minuette wave (i), so to be $19 in length. This may see it end close to the target calculated at minor degree. At 1,280 minor wave v would reach 1.618 the length of minute wave i.

This five wave impulse upwards may be minute wave v in its entirety. That would see minute wave v surprisingly short.

When minute wave v may be complete, then this main wave count expects the next movement down to begin minor wave 4 to subdivide as a five wave structure on the hourly chart, as a movement at minor degree should.


Gold Elliott Wave Chart Hourly 2016
Click chart to enlarge.

By simply moving the degree of labelling within minute wave v all down one degree, this five wave impulse up may be only a first wave impulse within a longer extended fifth wave for minute wave v.

In the short term, the structure is the same and a target about 1,280 for subminuette wave v to end minuette wave (i) would be reasonable.

Thereafter, the structure and depth of downwards movement will determine if minute wave v is over as a surprisingly short fifth wave, or if it is going to continue as a longer extension.

When minuette wave (i) is a complete impulse, then the next wave down for this alternate wave count would be expected to subdivide as a three wave structure. Minuette wave (ii) may not move beyond the start of minuette wave (i) below 1,224.78. If price remains above 1,224.78 and downwards movement subdivides as a three and not a five, then this alternate would be correct. Minute wave v would be extending.

At 1,350 minute wave v would reach 0.618 the length of minute wave iii.


Gold Chart Daily 2016
Click chart to enlarge. Chart courtesy of

Price has broken above the upper triangle trend line, but volume shows only a slight increase. One more upwards day with stronger volume would be required for confirmation of this classic technical analysis breakout. Until that happens, the breakout may be false.

Overall, volume is still declining as price moved sideways.

ADX is still flat today indicating the market is still consolidating. It is a lagging indicator based on a 14 day average. ATR is today declining, so it agrees.

On Balance Volume has come up to touch its short pink trend line. A break above that line would be a fairly bullish indicator. That may precede a breakout of price in the same direction.

Stochastics is not overbought, so there is still room for price to rise. RSI is not overbought either.

This analysis is published @ 05:27 p.m. EST.