Upwards movement was expected for Monday’s session but did not happen. The hourly Elliott wave count was invalidated by downwards movement.
Summary: Volume still supports a bullish wave count. Upwards movement should continue from here or very soon. The target remains at 1,477 and risk remains at 1,237.97.
New updates to this analysis are in bold.
Last published weekly chart is here.
DAILY ELLIOTT WAVE COUNT
Intermediate wave (2) may be a double combination.
Minor wave W is a zigzag, the first structure in a double. The two structures in the double may be joined by a simple zigzag for minor wave X in the opposite direction.
Minor wave Y may be a running contracting triangle. The triangle is supported by MACD hovering at the zero line here on the daily chart.
Minor wave 2 may not move beyond the start of minor wave 1 below 1,237.97.
The next wave up for intermediate wave (3) should be swift and strong. It must move above the end of intermediate wave (1) at 1,282.68. It must move far enough above this point to allow room for intermediate wave (4) to unfold and remain above intermediate wave (1) price territory.
At 1,477 it would reach equality in length with intermediate wave (1). This target is reasonable because intermediate wave (2) was very shallow.
If intermediate wave (2) is over as labelled, then it may have totalled a Fibonacci 34 sessions.
Minor wave 2 has moved lower and is now 0.645 the depth of minor wave 1. This is close to the 0.618 Fibonacci ratio, so again it is likely that minor wave 2 is over here but not yet confirmed. Minor wave 1 lasted two days. Minor wave 2 now has lasted a Fibonacci five days. If it is over here, it would have good proportion and look like a clear three wave structure on the daily and hourly charts.
HOURLY ELLIOTT WAVE COUNT
Minor wave 2 fits as a zigzag. Minute wave a must be seen as a five wave structure. This will fit although it does seem a little forced.
Minute wave c is 2.04 longer than equality in length with minute wave a. Minor wave 2 is just slightly below the 0.618 Fibonacci ratio. The structure looks overall like a big three wave movement. At this stage, the probability that it is over here or will be very soon is high.
Below, in order, are four points members may look for to have confidence in the next wave up having begun. Depending upon risk appetite one or more of the below points may be required before a long position may be entered. Alternatively, for the more adventurous a long position may be entered here. Stops must be set just below 1,237.97. Give the market a little room to move; it is possible still that minor wave 2 may move lower.
1. So far minute wave c fits neatly within a channel. A breach of this channel would indicate that minute wave c is most likely to be over. The channel breach may be followed by a throwback to support at the lower pink line.
2. A wide pink channel is drawn about the entire zigzag. When the upper edge of the pink channel is breached, that shall provide final trend channel confirmation of a trend change. If choosing to enter there, then a little patience and waiting for a small throwback to find support at the pink line may offer a better entry price.
3. Earliest price confidence may be had above 1,295.34.
4. Final price confirmation would come with a new high above 1,303.51.
At 1,367 minor wave 3 would reach 1.618 the length of minor wave 1. If this target is wrong, it may be too low. The next possible target would be at 2.618 the length of minor wave 1 at 1,433.
Minor wave 3 may only subdivide as an impulse. Within the impulse, minute wave i may begin about here. When it arrives minute wave ii may also be deep and may also be time consuming.
It would not be until the middle that acceleration to the upside may be expected to be clear for minor wave 3. The fourth wave corrections within it may be quick and shallow, and the fifth waves to end minor wave 3 and then the final fifth wave up of minor wave 5 also may be expected to be very strong movements, completing blowoff tops for Gold.
ALTERNATE DAILY ELLIOTT WAVE COUNT
It is still possible that intermediate wave (2) is not over.
Normally, the first large second wave correction within a new trend is very deep, often deeper than the 0.618 Fibonacci ratio. The main wave count sees intermediate wave (2) as very shallow at only 0.19 of intermediate wave (1). This is unusual. And so this alternate must be considered.
If any members have long positions on Gold already it is essential that stops are used in case this alternate unfolds.
Intermediate wave (2) may be an expanded flat correction. Minor wave A is a three, minor wave B is a three and a 1.28 length of minor wave A. This is within the normal range of 1 to 1.38.
At 1,183 minor wave C would reach 1.618 the length of minor wave A. This would be the most likely target. If price keeps falling through this first target, then the second target would be at 1,108 where minor wave C would reach 2.618 the length of minor wave A.
Intermediate wave (2) may not move beyond the start of intermediate wave (1) below 1,046.27.
ALTERNATE HOURLY ELLIOTT WAVE COUNT
Minor wave C must subdivide as a five wave structure. So far only minute waves i and ii may be complete.
Minute wave iii must subdivide downwards as an impulse. It would be unlikely to be over at the low for today because that does not allow enough room for upwards movement for minute wave iv to unfold and remain below minute wave i price territory.
Minute wave iii is most likely to be incomplete. Minuette wave (i) is a complete impulse. Minuette wave (ii) may now move higher, to end about the 0.618 Fibonacci ratio of minuette wave (i) at 1,282.
Thereafter, minuette wave (iii) must make a new low below the end of minuette wave (i).
Minuette wave (ii) may not move beyond the start of minuette wave (i) above 1,295.34.
Click chart to enlarge. Chart courtesy of StockCharts.com.
Strong downwards movement for Monday is not supported by volume. Volume for Monday is lighter than the prior upwards day of Friday. The volume profile continues to be bullish: volume increases as price rises, and as price falls it does so on lighter and declining volume.
ADX is today slightly declining indicating the market may not be trending. This indicator is lagging as it is based on a 14 day average. ADX has not indicated a trend change. If the ADX line again turns upwards, an upwards trend would again be indicated.
ATR is increasing today indicating the market may be again trending.
On Balance Volume today strongly supports the fall in price to end here. OBV should serve to hold up the fall in price as OBV comes down to touch the blue line almost again. It depends on exactly how the line is drawn, so there is a little room for movement. If it is drawn to touch the last low for OBV, then it is almost perfectly touched today.
RSI is almost neutral. There is room for price to rise or fall.
Stochastics has returned from overbought. There is room again for price to rise.
Along the way up, the 13 day moving average may help to show where corrections find support. This does not always work for the earliest corrections within a new trend for Gold, but it is likely to work once the trend gathers momentum.
This analysis is published @ 07:59 p.m. EST.