Again, upwards movement was expected.
A new high above 1,333.66 added further confidence to the main Elliott wave count. The target remains the same.
Summary: The trend is up. The target remains at 1,582. Corrections are an opportunity to join the trend. Invest no more than 3-5% of equity on any one trade and always use a stop loss on all trades. In the short term, another small second wave correction may arrive within the next 24 hours. The invalidation point is at 1,312.50 and stops may be set just below this point. The short term volume profile is still bearish, so members are strongly advised to manage risk carefully. It is still possible that the pullback is not over and may yet move lower below 1,312.50. For positive positions today, stops should be moved to at least break even to eliminate risk.
New updates to this analysis are in bold.
Grand SuperCycle analysis is here.
Last weekly chart is here.
DAILY ELLIOTT WAVE COUNT
Primary wave 2 is a complete expanded flat correction. Price from the low labelled primary wave 2 has now moved too far upwards to be reasonably considered a continuation of primary wave 2. Primary wave 3 is very likely to have begun and would reach 1.618 the length of primary wave 1 at 1,582.
Primary wave 3 may only subdivide as an impulse.
So far intermediate waves (1) and (2) may be complete within primary wave 3. The middle of primary wave 3 may have begun and may also only subdivide as an impulse.
Within intermediate wave (3), the end of minor wave 1 is moved up to the last high. This fits on the hourly chart although it looks odd here on the daily chart. There was a small fourth wave correction up at the end of minor wave 1 and it subdivides on the hourly chart as an impulse. Minor wave 2 may be a complete zigzag, also subdividing as a zigzag on the hourly chart. If minor wave 2 is over, it would be 0.50 the depth of minute wave i.
No second wave correction may move beyond the start of its first wave below 1,310.84 within minor wave 3.
At 1,437 intermediate wave (3) would reach 1.618 the length of intermediate wave (1). If price keeps going upwards through this first target, or if it gets there and the structure is incomplete, then the next target would be at 1,552 where intermediate wave (3) would reach 2.618 the length of intermediate wave (1).
HOURLY ELLIOTT WAVE COUNT
Minute wave iii may only subdivide as an impulse. At 1,372 it would reach 2.618 the length of minute wave i. If this target is wrong, it may be too low. If this target is right, then minute wave v would be a swift strong extension, which is what should be expected.
Minute wave iv may be expected to be very brief and shallow, so that minor wave 3 has a curved look. Gold often exhibits swift strong fifth waves, and this tendency is particularly prevalent for Gold’s third wave impulses. This is what should be expected for the end of minor wave 3 and probably also the end of intermediate wave (3). These impulses look like they are developing a typically curved look for Gold. When the fourth wave corrections higher up arrive, they may be very quick and shallow and not offer good entry points to join the trend except for the most nimble and active traders.
So far, within minute wave iii, the first wave of minuette wave (i) may be very close to completion. Within this impulse, subminuette wave iv may not move into subminuette wave i price territory below 1,321.60. Subminuette wave iv is likely to be very shallow because subminuette wave ii was very deep.
When subminuette wave v makes a new high above the end of subminuette wave iii, avoiding a truncation, then it may be over at any stage. The following correction for minuette wave (ii) may or may not show up on the daily chart. At this stage, within a big third wave, it may still show up. Gold often exhibits deep and time consuming second wave corrections to start its third wave impulses.
If minuette wave (ii) does show up on the daily chart as one or more red candlesticks or doji, it would offer an opportunity to join the upwards trend. Minuette wave (ii) may not move beyond the start of minuette wave (i) below 1,312.50.
Draw a best fit channel about this upwards movement, shown in orange. In the first instance, look for corrections to find support at the lower edge of this channel. If that trend line is breached, then look for support at the next trend line shown in cyan.
At 1,515 minor wave 3 would reach 1.618 the length of minute wave i. This target fits only with the second higher target for intermediate wave (3) on the daily chart.
Minor wave 3 should have support from rising volume and it should exhibit stronger momentum than minor wave 1.
Intermediate wave (1) lasted a Fibonacci thirteen days. Minor wave 1 lasted a Fibonacci eight days. Minor wave 3 may be expected to last longer, about a Fibonacci thirteen or maybe twenty one days.
ALTERNATE DAILY ELLIOTT WAVE COUNT
Alternates should always be considered. This alternate today will be published as a daily chart only. No hourly chart will be published for it because that would give it undue weight.
This alternate is still possible in that many things are possible. It does have a reduced probability today though.
It is still possible that minor wave 2 could be continuing further sideways or lower as a double zigzag or double combination. It may not move beyond the start of minor wave 1 below 1,249.94.
If minor wave 2 is continuing, then it would be much longer in duration than intermediate wave (2), one degree higher. So far intermediate wave (2) lasted six sessions, and minor wave 2 would be in its fifteenth session but only just over half way through. At its end, minor wave 2 would be grossly disproportionate to intermediate wave (2). For this reason, this alternate wave count must be judged to have a lower probability than the main wave count today.
If minor wave 2 is continuing sideways as a double combination, then within it minute wave x may make a new high above the start of minute wave w at 1,374.91. There is no upper invalidation point for this alternate wave count, so there cannot be an upper confirmation point for the main wave count.
This alternate is presented again today because it has some support so far from volume; the short term volume profile is bearish still.
The week before last week completed a bearish engulfing candlestick pattern that was supported by an increase in volume. This bearish reversal pattern indicated a trend change from up to either down or sideways.
This weekly candlestick completes another red candlestick with lighter volume than last week. The fall in price last week was not supported by volume. Volume last week was lightest for six weeks, so this decline is significant. This last downwards week looks like a counter trend pullback within a larger upwards trend. The prior rise in price was supported by volume.
The reversal implications of the bearish engulfing candlestick pattern may now be fulfilled. A reversal pattern only indicates a trend change and gives no indication of how far or for how long the next trend should be. It also does not mean a change from up to down or down to up but may also mean a change from up to sideways or down to sideways.
Price may be finding support at the horizontal trend line about 1,310. Two weeks in a row with longer tails on these candlesticks is slightly bullish.
On Balance Volume is not working with the upper purple line, because it broke above the line giving a bullish signal only to turn and break below the line. The lower line so far should provide support if OBV moves lower.
Monday’s session completes a small hammer candlestick pattern. When this pattern occurs at a low after a decline, then it is a bullish reversal signal.
The daily candlestick for today’s session is too small. The high for this candlestick is 1,329, but the high for the same candlestick on COMEX data is 1,341. Volume from both data feeds shows the two upwards days on declining volume, where the two downwards days immediately prior came on stronger and increasing volume. In the short term, this volume profile is bearish and does not support the main Elliott wave count.
This rise in price is not supported by volume, so it is suspicious. For this reason, the risk presented by the alternate Elliott wave count should be understood to be possible.
On Balance Volume today has broken above the lower stronger purple trend line. The previous bearish signal given by a break below this line is now negated. If OBV breaks above the upper purple line, that will be a reasonable bullish signal.
RSI is neutral. There is plenty of room for price to rise or fall.
ADX is still declining. This pullback has brought ADX right down from extreme back into normal range. A trend may again develop. The +DX and -DX lines are whipsawing about each other. ADX is not indicating yet which direction a trend may develop.
ATR is also declining in agreement with ADX. This market is still consolidating. Both these indicators are lagging as they are based on 14 day averages.
Stochastics reached oversold, just, and is now returning. An end to the downwards swing should be expected about here as Stochastics reached oversold and price reached support at the same time, at the trend line about 1,310.
This analysis is published @ 07:39 p.m. EST.