A five up completed and is being followed by a three down. The daily Elliott wave count and targets remain the same.
Summary: The trend is up. Corrections present an opportunity to join the trend. Expect upwards momentum to increase this week. The target for this third wave to end remains at 1,582. The middle of it may end about 1,463, but the correction after the middle may be brief and shallow.
New updates to this analysis are in bold.
Last weekly chart can be found here.
Grand SuperCycle analysis is here.
DAILY ELLIOTT WAVE COUNT
Intermediate wave (2) is a complete expanded flat correction. It is a shallow 0.350 correction of intermediate wave (1) lasting 56 days, just one more than a Fibonacci 55. There is no Fibonacci ratio between minor waves A and C. Minor wave C is a complete impulse.
Minor wave 2 may have been a quick, deep 0.57 zigzag over in just six sessions.
When minor wave 3 is complete, then the following correction for minor wave 4 may be relatively brief and shallow. Intermediate wave (3) may end with a strong blowoff top typical of commodities. This may pull minor wave 4 up forcing it to be over very quickly. For position traders, the target of intermediate wave (3) may be more useful than a target for minor wave 3.
Add a base channel (black lines) to intermediate waves (1) and (2). Draw the first trend line from the low at 1,046.27 on 3rd December, 2015, to the low labelled intermediate wave (2), then place a parallel copy on the high of intermediate wave (1). Along the way up, downwards corrections should find support at the lower edge of the base channel, if they get that low. At this stage, it looks like corrections are shallow and may not reach back down to the base channel. When intermediate wave (3) moves towards the middle, it should break above resistance at the upper edge of the base channel. When that trend line is breached, then it may offer support. A break above a base channel confirms a third wave up.
Within minute wave iii, no second wave correction may move beyond its start below 1,305.59.
At 1,582 intermediate wave (3) would reach 1.618 the length of intermediate wave (1).
Minor wave 3 has begun and may only subdivide as an impulse. At 1,437 minor wave 3 would reach 1.618 the length of minor wave 1. If when price gets to this first target the structure is incomplete, or if price keeps rising through this first target, then the second target would be used. At 1,552 minor wave 3 would reach 2.618 the length of minor wave 1.
Draw a base channel now about minuette waves (i) and (ii) (shown in green). Copy it over to the hourly chart.
Cyan, lilac and now red trend lines are copied over from the weekly chart. These are longer term lines which may offer support / resistance. Weekly and daily charts are on a semi-log scale.
Intermediate wave (1) lasted 71 days (not a Fibonacci number) and intermediate wave (2) lasted 56 days (one more than a Fibonacci 55). Intermediate wave (3) should be expected to be longer in length and duration than intermediate wave (1). An early expectation may be for it to total a Fibonacci 89 days. So far it has lasted 31 days.
MAIN HOURLY ELLIOTT WAVE COUNT
Both hourly wave counts today see subminuette wave i complete. The only question at this stage is whether or not subminuette wave ii is complete.
Ratios within subminuette wave i are: micro wave 3 is 1.5 longer than 0.618 the length of micro wave 1, and micro wave 5 is 1.01 longer than 0.618 the length of micro wave 3. The COMEX data I am using for the Gold cash market has the high for micro wave 1 at 1,363.83 and the low for micro wave 4 at 1,363.85, so there is no overlap.
So far subminuette wave ii remains contained within the small channel about it. The expectation should be for subminuette wave ii to continue while price remains within this channel.
So far within subminuette wave ii downwards movement to the low for Monday subdivides best as a five wave structure. This may only be micro wave A of a zigzag. At 1,351 micro wave C would reach 0.382 the length of micro wave A. As soon as micro wave C has made a new low below the end of micro wave A at 1,351.32 avoiding a truncation, then it may be over.
If price continues lower, then look for strong support at the lower edge of the green base channel.
When subminuette wave ii is confirmed as complete for this main hourly wave count, then a target may be calculated for subminuette wave iii. The expectation would be for subminuette wave iii to be 2.618 the length of subminuette wave i which would see it 90.58 in length.
Subminuette wave ii may not move beyond the start of subminuette wave i below 1,340.21.
ALTERNATE HOURLY ELLIOTT WAVE COUNT
It is possible that subminuette wave ii is complete, but this idea must remain an alternate while price remains contained within the channel. It requires some indication, which may be likely by a breach of the upper edge of the small downwards sloping channel.
If subminuette wave ii is complete, then within it micro wave C does not look like a very good five wave structure. This wave count looks forced trying to see what looks like a five down as a three. For this reason also today it must be an alternate.
At 1,442 subminuette wave iii would reach 2.618 the length of subminuette wave i.
Subminuette wave iii should show strong volume, an increase in momentum, and bring indicators into extreme for several days.
Within subminuette wave iii, no second wave correction may move beyond its start below 1,351.32.
Price continues to find resistance at the upper horizontal line about 1,365. If price breaks above this line, then thereafter look for support there.
Monday’s downwards day was not supported by volume. The volume profile remains bullish. Price comes with increased volume as price rises. Price comes with lighter volume as price falls.
On Balance Volume remains bullish above the purple line.
Monday’s downwards day has brought RSI down from extreme. There is again room for price to rise.
ADX still indicates an upwards trend is in place. ADX is extreme above 35, but it can remain extreme for several days during strong trends for Gold.
ATR is overall flat to declining, and not in agreement with ADX at this time. If ATR turns upwards again, then more confidence may be had in an upwards trend.
For now it seems fairly clear that Gold is most likely still in an upwards trend. Price should be expected to find support about the 13 day moving average.
This analysis is published @ 08:00 p.m. EST.