The main hourly Elliott wave count was invalidated and the alternate confirmed. Thereafter, price moved lower towards the target then turned upwards as expected for that wave count.
Summary: The trend is up. Corrections present an opportunity to join the trend. Expect upwards momentum to increase next 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. 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).
Minor waves 1 and 2 are complete within intermediate wave (3). 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 30 days.
HOURLY ELLIOTT WAVE COUNT
This was the alternate hourly wave count yesterday, and today is the only hourly wave count left by process of elimination.
Minuette wave (ii) continued lower to complete a double zigzag. It is a relatively deep zigzag at 0.50 the length of minuette wave (i).
There is a series now of four overlapping first and second waves so far within this upwards movement from the low on 3rd of December. Intermediate wave (2) was a relatively shallow 0.35 correction of intermediate wave (1), minor wave 2 was relatively deep at 0.57 of minor wave 1, minute wave ii was relatively shallow at 0.48 of minute wave i, and now minuette wave (ii) is halfway of minuette wave (i). There appears to be no pattern here.
Minuette wave (iii) would reach 1.618 the length of minuette wave (i) at 1,452. If this target is wrong, it may be too low. Expect any surprises over the next few weeks to be to the upside. If price keeps going upwards through this first target, then the next expectation would be at 1,522 where minuette wave (iii) would reach 2.618 the length of minuette wave (i).
Along the way up, the lower edge of the base channel should provide support for corrections. When subminuette wave i is a complete impulse, then subminuette wave ii should find support there, if it gets that low. At this stage, within a large third wave expect corrections to be increasingly brief and shallow. Price may not get low enough to touch the lower edge of the base channel.
The strength of a third wave should be able to push price above the upper edge of the base channel. Once that upper edge is breached, then that line may provide support.
Subminuette wave ii may not move beyond the start of subminuette wave i below 1,340.21.
Friday’s candlestick is green with a long lower wick. It looks bullish at this stage. Upwards movement was supported by an increase in volume for Friday.
On Balance Volume continues to be bullish; it remains above the purple trend line.
RSI is only just barely overbought. This indicator may remain extreme for several days during a strongly trending market for Gold. It should be used to indicate weakness if it exhibits divergence with price. At this stage, there is no divergence between price and RSI.
ADX still indicates there is an upwards trend in place. ADX is extreme, over 35. But during Gold’s third waves (and its strong C waves) ADX can remain extreme for reasonable periods of time.
ATR at the end of the week is again increasing, agreeing with ADX.
Stochastics still exhibits some divergence with price: stochastics made a lower high as price made a new high this week. This divergence is bearish but may have been resolved now by two days of downwards movement.
The classic technical analysis picture is very bullish for Gold, but extreme readings are sending a warning to be on the lookout for any weakness in upwards movement. At the end of this week, no weakness to indicate an end to the bull run is seen. Expect the bull run to continue.
This analysis is published @ 02:40 a.m. EST on 9th July, 2016.