A little upwards movement was followed by some downwards movement, exactly as expected.
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 has arrived and may end about 1,325. The invalidation point is at 1,312.50 and stops may be set just below this point. If price breaks below 1,312.50, then the target for a deeper pullback to end would be 1,296.
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 arrives, 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) is now complete. Minuette wave (ii) is now underway and may end about the 0.618 Fibonacci ratio at 1,325. If this target is wrong for this correction, then it may be too low. Minuette wave (ii) should have a three wave look to it.
Gold often exhibits deep and time consuming second wave corrections to start its third wave impulses.
If minuette wave (ii) looks like it is showing up on the daily chart as one or more red candlesticks or doji, it may 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. At this stage, the correction of minuette wave (ii) is finding support at the lower edge of this channel. Minuette wave (ii) should be expected to break through this support and break out of the channel.
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 should only be used now if price makes a new low below 1,312.50, invalidating the main wave count.
This alternate is still possible in that many things are possible. It does have a reduced probability 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 last two green daily candlesticks come with an increase in volume. There was support for the rise in price from volume. Now a red daily candlestick shows much lighter volume. In the short term, the volume profile is now clearly bullish and this supports the main Elliott wave count.
On Balance Volume is finding some resistance at the upper purple trend line. If OBV breaks above this line, that would be a bullish signal. If OBV moves lower, it may find some support at the lower purple line, although this line was recently weakened by a breach. The lower purple line might serve to hold up the fall in price from moving too far.
RSI is close to neutral still. There is plenty of room for price to rise or fall.
ADX is flattening off. This pullback has brought ADX right down from extreme. There is again plenty of room for a trend to develop. Currently, ADX does not yet indicate a trend is in place.
ATR agrees with ADX. ATR is still overall declining.
Stochastics is returning from oversold. An upwards swing should be expected here as most likely, to continue until Stochastics reaches overbought and price reaches resistance. The next resistance line for price is about 1,375.
This analysis is published @ 07:34 p.m. EST.