Upwards movement continues as expected for Gold.
Summary: The trend is up. Corrections present an opportunity to join the trend. Expect upwards momentum to increase in coming weeks. The target for this third wave to end remains at 1,582. The middle of it may end about 1,437, 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. If minor wave 3 has begun there, then at 1,437 it would reach 1.618 the length of minor wave 1.
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).
Adjust the support line, drawn here in cyan. At this stage, price may now continue to find support here as a third wave up accelerates towards a blowoff top. The top is still at least days away (or maybe weeks).
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 28 days.
MAIN HOURLY ELLIOTT WAVE COUNT
Both hourly wave counts today will show movement from the low labelled minute wave ii.
The target for minor wave 3 remains the same. At 1,437 minor wave 3 would reach 1.618 the length of minor wave 1.
If minute wave ii was very quick as labelled, then minute wave iv may be quicker still. A target is not given for minute wave iii because the following correction for minute wave iv may be too quick to show up on the daily chart.
Minute wave iii may only subdivide as an impulse. Within minute wave iii, minuette waves (i) and (ii) may be complete. Minuette wave (iii) upwards may be underway.
Minuette wave (iii) may also only subdivide as an impulse. Within minuette wave (iii), subminuette wave i may be close to completion.
Price is again finding support at the cyan trend line (here, a channel) and sitting about the same place as the cyan line on the daily chart. Each time price comes down to touch the lower edge of the channel at this stage it represents an opportunity to join the upwards trend.
When subminuette wave i is complete, then a brief correction for subminuette wave ii should unfold lower. It may not move beyond the start of subminuette wave i below 1,338.21.
ALTERNATE HOURLY ELLIOTT WAVE COUNT
It is possible that only minuette wave (i) is complete within the impulse of minute wave iii. If this is correct, then it is possible that a red daily candlestick or doji may complete for the next session.
Minuette wave (ii) may end at either the 0.382 or 0.618 Fibonacci ratios of minuette wave (i) at 1,348 or 1,332. In this instance, the upper target at 1,348 would be favoured. At this point, in a strong third wave up, the corrections may be expected to be more brief and shallow than normal.
The channel here is drawn about minuette wave (i) using Elliott’s second technique. If price breaks below the cyan line on the main hourly wave count, then consider this alternate. At that stage, it would increase in probability. Look for price to find some support at the lower edge of the orange channel on this alternate wave count chart. Thereafter, it may break through that trend line.
Minuette wave (ii) may not move beyond the start of minuette wave (i) below 1,305.59.
Volume for today’s session was lighter than yesterday, but overall volume is still increasing as price moves higher.
The long upper wick on today’s candlestick is bearish, but overall price is still moving higher.
ADX still indicates an upwards trend is in place. ADX is nearing extreme. The trend may continue yet for a while but signs of exhaustion should be watched for carefully.
ATR is declining, not agreeing with ADX. This may be due to the unusually large range for 24th of June being part of this average.
On Balance Volume is bullish with a break above the two purple lines. There are no upper lines to provide resistance at this stage to OBV. There is no divergence between price and OBV to indicate weakness to this upwards trend.
RSI is only just entering overbought. RSI may remain extreme for several days during a trending market. When it shows divergence, then it would be indicating weakness. There is no divergence today between price and RSI.
Stochastics is overbought, but this oscillator may remain extreme for reasonable periods of time during a trending market. Stochastics still shows some divergence with price between the last two swing highs of today and 24th of June. However, divergence between Stochastics and price is not always reliable. This should be read as a weak bearish signal only.
Overall, the technical analysis picture is still more bullish than bearish. Expect price to find support at the 13 day moving average if a deeper correction unfolds.
This analysis is published @ 07:19 p.m. EST.