Upwards movement was expected, but a warning was given due to some bearishness in volume.
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, a correction is unfolding against the trend and may end within the next 24 hours at about either 1,346 (more likely) or 1,333.
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
The wave count is changed today to see only three first and second waves complete: intermediate waves (1) and (2), minor waves 1 and 2, and minute waves i and ii. All are shown on the daily chart.
Now only minuette wave (i) is complete within minute wave iii. Downwards movement for Wednesday’s session looks like the start of minuette wave (ii).
Minute wave ii lasted 41 hours. Minuette wave (ii) one degree lower is likely to be of a shorter duration. So far it has lasted about 30 hours. This correction is likely to be complete within the next 24 hours, before the next analysis is published.
Minuette wave (ii) is most likely to subdivide as a zigzag. So far it looks like subminuette wave a is an almost complete impulse. When subminuette wave a is complete, then a correction up for subminuette wave b may not move beyond the start of subminuette wave a at 1,366.95 if minuette wave (ii) is indeed unfolding as a zigzag.
When subminuette waves a and b are complete, then a final five down for subminuette wave c should unfold.
Because this is a lower degree second wave correction within a big third wave up, it may be more shallow than second waves normally are due to a strong upwards pull from the middle of primary wave 3. Minuette wave (ii) may be more likely to end about the 0.382 Fibonacci ratio at 1,346. This would expect subminuette wave c to be shorter than subminuette wave a.
It is still reasonably likely that minuette wave (ii) could end about the 0.618 Fibonacci ratio at 1,333.
Minuette wave (ii) may not move beyond the start of minuette wave (i) at 1,312.50.
The lower cyan trend line may offer support. If this line is touched, expect price to bounce up from there. If that happens, it would offer a very good entry point for long positions.
When minuette wave (ii) is complete, then upwards movement should resume and should show an increase in momentum.
Last week completes a bullish engulfing weekly candlestick that has stronger volume than the week before. After a short downwards movement, this is a reversal pattern from down to up or down to sideways.
Price broke above resistance last week about 1,345 and closed above this line. Next resistance would be about the last high about 1,380.
On Balance Volume is giving a bullish signal at the end of last week with a break above the purple trend line. The next line to offer resistance for OBV is the new green line.
RSI is not extreme yet. There is room for price to rise further.
Overall, the weekly volume profile is bullish. Volume increases as price rises and volume declines as price falls. There is no indication yet of an end to this upwards trend at the weekly chart level.
A smaller range downwards day with a decrease in volume looks corrective. Price is finding some resistance at the horizontal line about 1,375.
In the short term, the volume profile is still more bullish than bearish. The last two downwards days show clearly lighter volume and should be expected to be counter trend movements.
Overall, volume has been declining as price has been rising since 25th of July. This is concerning for the Elliott wave count. However, sometimes early on in Gold’s trends this happens. This happened up to the 25th of December, 2015, yet Gold did not make a new low and began a long sustained upwards wave from there. From 29th of January, 2016, to 2nd of February, 2016, price rose on light and declining volume but was followed by a sustained rise that was then supported by volume.
It may be at this stage that resistance is holding price down and forcing some weakness. Another day or so of downwards movement may be required to resolved this bearishness short term.
Caution is still advised with the wave count due to weak volume. A deeper and more sustained pullback may unfold here than the Elliott wave count expects.
On Balance Volume exhibits hidden bearish divergence at the last high: OBV made a new high but price did not. This indicates weakness in price. However, divergence from OBV is not as reliable as trend lines for OBV. The break above both purple trend lines is a bullish signal.
RSI is not extreme. There is plenty of room for price to rise or fall.
ADX is increasing, indicating an upwards trend is in place.
ATR still disagrees as it is declining.
Stochastics is overbought, but this oscillator may remain extreme for reasonable periods of time during a trending market.
This analysis is published @ 06:47 p.m. EST.