Both Elliott wave counts from last analysis remain valid.
Summary: Some more downwards movement next week looks most likely, to about 1,279. If this target is wrong, it may be a little too high.
New updates to this analysis are in bold.
Last weekly charts, and a more bearish weekly alternate, are here.
Grand SuperCycle analysis is here.
WEEKLY ELLIOTT WAVE COUNT
This will be the new main wave count.
Within the new upward trend for Super Cycle wave (b), cycle wave a is most likely unfolding as a five wave impulse.
Within cycle wave a, so far primary waves 1 and 2 are complete. Thereafter, this wave count differs from the two alternates.
This main wave count will expect primary wave 3 to be longer than primary wave 1. Because this is very common, this is the main wave count and it expects the most common scenario is most likely. At 1,582 primary wave 3 would reach 1.618 the length of primary wave 1.
Only intermediate wave (1) so far is complete within primary wave 3. Intermediate wave (2) may be close to completion. It may find support at the lower edge of the base channel drawn about primary waves 1 and 2. Intermediate wave (2) may not move beyond the start of intermediate wave (1) below 1,200.07.
DAILY ELLIOTT WAVE COUNT
Primary wave 3 may only subdivide as an impulse.
If intermediate wave (1) was over at the last high, then it may have lasted 27 days. So far intermediate wave (2) may have taken 37 days and would still be incomplete.
Within minute wave iii, no second wave correction may move beyond the start of its first wave above 1,356.85.
At 1,279 minor wave C would reach 1.618 the length of minor wave A. Price may end downwards movement when it finds support at the lower edge of the maroon base channel drawn about primary waves 1 and 2.
Intermediate wave (2) may not move beyond the start of intermediate wave (1) below 1,200.07.
Primary wave 2 lasted 56 days (one more than a Fibonacci 55). So far intermediate wave (2) is more brief in duration. It has lasted 37 days and may be just a few days away from completion.
Draw a small channel about minute wave iii, using Elliott’s technique, and copy it over to the hourly chart.
HOURLY ELLIOTT WAVE COUNT
Within minuette wave (iii), the structure looks to be incomplete. This part of downwards movement is essentially seen in the same way for both wave counts, only the degree of labelling differs. Both see an impulse unfolding lower.
Minor wave C must subdivide as a five wave structure. This wave count would be confirmed with a new low below 1,310.84.
Minor wave C still needs more downwards movement. Along the way down two more fourth wave corrections should complete and be followed by fifth waves downwards towards the target.
Minuette wave (iv) was a deep zigzag exhibiting alternation with minuette wave (ii) in structure but not depth.
Minuette wave (iii) was 2.83 short of 2.618 the length of minuette wave (i). Minuette wave (v) may not exhibit a Fibonacci ratio to either of minuette waves (i) or (iii).
At 1,297 minute wave iii would reach 1.618 the length of minute wave i.
Minuette wave (iv) overshoots the upper edge of the Elliott channel, and then price quickly returns to within the channel. Along the way down, corrections should find resistance at the upper edge of the channel and downwards movement may find support at the lower edge. If price breaks below the lower edge, then look out for a strong fifth wave downwards.
If price moves below 1,310.84, then expect more downwards movement for a deeper pullback to end about 1,279. Look also for price to find support at the maroon channel on the daily chart. The target at 1,279 may be a little too low; the maroon trend line may stop price before it reaches the target.
ALTERNATE DAILY ELLIOTT WAVE COUNT
This was previously the main wave count.
The duration of minute wave ii now gives this wave count the wrong look. Lower degree second waves should be more brief in duration than second waves of a higher degree. Here, minute wave ii has lasted 17 days, minor wave 2 lasted 11 days, and intermediate wave (2) lasted 6 days.
At 1,437 intermediate wave (3) would reach equality in length with intermediate wave (1). At 1,552 intermediate wave (3) would reach 1.618 the length of intermediate wave (1).
Minute wave ii may not move beyond the start of minute wave i below 1,310.84.
ALTERNATE HOURLY ELLIOTT WAVE COUNT
A final fifth wave down would still be required for this alternate wave count. Upwards movement for Friday’s session will not subdivide as a five; it fits only as a three because of the deep spike labelled sub micro wave (B).
Friday’s session would have to be another fourth wave correction for this alternate.
After a slight new low, then this alternate wave count would expect upwards movement.
A new high above 1,339.48 is required for confidence in this wave count. At that stage, a third wave up at four degrees should be expected to be in the very early stages.
ALTERNATE III WEEKLY ELLIOTT WAVE COUNT
It is possible that primary wave 3 is over and shorter than primary wave 1. Primary wave 3 shows stronger momentum and volume than primary wave 1 (see technical analysis weekly chart).
If primary wave 3 is over, then the current consolidation for Gold would be primary wave 4.
Primary wave 2 was a relatively shallow 0.35 expanded flat correction. Primary wave 4 may be unfolding as a deeper zigzag which would exhibit perfect alternation.
Primary wave 4 may not move into primary wave 1 price territory below 1,282.68.
Primary wave 5 would be limited to no longer than equality in length with primary wave 3, so that the core Elliott wave rule stating a third wave may not be the shortest is met. Primary wave 5 would have a limit of 174.84.
ALTERNATE III DAILY ELLIOTT WAVE COUNT
The target at 1,279 is invalid for this wave count. This wave count expects more downwards movement to complete a five wave impulse for intermediate wave (C) in the same way as the main wave count expects a five wave impulse down to complete minor wave C. Only the degree of labelling differs; this wave count is one degree higher.
The hourly chart would be exactly the same except for the degree of labelling.
It is also possible that primary wave 4 may be a regular contracting triangle. If sideways movement continues in an ever decreasing range, then that idea would be published. At this stage, a zigzag looks more likely because the subdivisions have a slightly better fit.
A strong downwards week with an increase in volume supports the main and alternate III wave counts. Overall, volume is still declining and price remains range bound.
The prior two green weekly candlesticks had long upper shadows which was bearish.
Price may find some support about 1,310.
On Balance Volume at the end of this week has come down to find support at the purple trend line. This may help to stop price falling much further.
RSI is not extreme. There is some hidden bullish divergence with price and RSI: RSI has made a lower low below the low of 25th of July but price has made a higher low. This indicates some weakness to this downwards movement. It is more likely to be a smaller correction than a sustainable trend.
The regular technical analysis yesterday was very bearish. It is more bullish today.
Friday’s session saw overall upwards movement and a strong volume spike. Volume during the consolidation, which began back on about 7th of July, is now strongest for two upwards days of 8th of July and 26th of August. This suggests an upwards breakout is more likely than downwards.
Price may be finding some support about the 55 day moving average. The next support line would be about 1,310 – 1,305.
The bearish signal given from On Balance Volume in last analysis with a break below the yellow support line is now negated by OBV returning back above the line. OBV may find some resistance at the purple line. A break above the purple line would be a bullish signal.
RSI is not extreme and exhibits no divergence with price.
ADX is declining, indicating no clear trend. The +DX and -DX lines are fluctuating about each other, which is common for a consolidation.
ATR shows a small increase for Friday’s session, but one day of increase is not enough to indicate a trend beginning. Overall, in agreement with ADX, ATR is still declining.
Stochastics is more firmly entering oversold now. Now that Stochastics is oversold, it should be expected that price end its downwards swing when it finds support about 1,310 – 1,305. This fits the main and alternate III Elliott wave counts.
As the Bollinger Bands are now beginning to widen, a trend may be about to begin.
This analysis is published @ 02:04 a.m. EST on 28th August, 2016.