Upwards movement was expected from yesterday’s Elliott wave count.
Summary: Price should continue upwards as an upwards trend develops. Range and volatility are expected to increase. A short term target is now calculated at 1,446. The long term target remains at 1,585. On Balance Volume today gives a bullish signal in support of the Elliott wave count. Risk must remain at 1,302.93.
New updates to this analysis are in bold.
Last weekly charts are here.
Grand SuperCycle analysis is here.
DAILY ELLIOTT WAVE COUNT
Primary waves 1 and 2 are complete. Thereafter, this wave count differs from the alternate.
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. It expects the most common scenario is most likely. At 1,585 intermediate wave (3) would reach 1.618 the length of intermediate wave (1).
Intermediate wave (2) may now be complete ending just below the 0.382 Fibonacci ratio of intermediate wave (1) and lasting 40 days. Within intermediate wave (3), minor wave 2 may not move beyond the start of minor wave 1 below 1,302.93.
Draw a channel about intermediate wave (2) using Elliott’s technique for a correction (blue lines). Price is finding some resistance on the way up about the upper edge. After breaking through resistance at the upper blue line price may then turn down to find support about there.
With this wave count expecting a third wave at two large degrees to begin, look out for surprises to the upside at this stage.
Intermediate wave (1) lasted 27 days and intermediate wave (2) lasted 40 days. Intermediate wave (3) may be reasonably expected to last longer than intermediate wave (1) in both time and price. A Fibonacci 55 days would be a first expectation.
HOURLY ELLIOTT WAVE COUNT
A single zigzag may now be complete.
At the daily chart level, the green doji for 12th of September now gives minor wave 2 a clearer three wave look.
Within minor wave 2 there is no Fibonacci ratio between minute waves a and c.
Ratios within minute wave a are: there is no Fibonacci ratio between minuette waves (i) and (iii), and minuette wave (v) is 0.7 longer than equality in length with minuette wave (i).
Ratios within minute wave c are: minuette wave (iii) has no Fibonacci ratio to minuette wave (i), and minuette wave (v) is 0.58 short of 2.618 the length of minuette wave (i).
So far a five wave impulse upwards from the low of minor wave 2 may have completed. Ratios within minuette wave (i) are: subminuette wave iii is just 0.03 short of 2.618 the length of subminuette wave i, and subminuette wave v has no Fibonacci ratio to either of subminuette waves i or iii.
Minuette wave (ii) may now be complete as a relatively quick zigzag, and relatively deep at 0.51 of minuette wave (i). If minuette wave (ii) continues any lower as a flat, combination or double zigzag then it may end closer to the 0.618 Fibonacci ratio of minuette wave (i) at 1,319.50.
Minuette wave (ii) may not move beyond the start of minuette wave (i) below 1,315.91.
Minor wave 3 may only subdivide as an impulse. Within it the first wave of minute wave i is unlikely to be complete, it should last a few days. When minute wave i is over then another relatively deep correction for minute wave ii should unfold and is very likely to show up at the daily chart level, it may last about two to four days. This should present another opportunity to join the upwards trend.
ALTERNATE DAILY ELLIOTT WAVE COUNT
It is possible that primary wave 3 is over and shorter than primary wave 1. Primary wave 3 shows stronger 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 a deeper zigzag which would exhibit perfect alternation.
Within primary wave 5, no second wave correction may move beyond the start of its first wave below 1,302.93.
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 at 1,477.77.
The hourly chart would be exactly the same.
Click chart to enlarge. Chart courtesy of StockCharts.com.
Last week moved price reasonably higher, but as yet now a new high above 1st August or 5th July has been made. The green candlestick colour is bullish, but the long upper wick is bearish. The decline in volume for an overall upwards week is bearish, but to understand what is exactly happening in terms of volume it needs to be looked inside at daily volume bars.
On Balance Volume remains bullish with an upwards move further away from the yellow support line.
RSI is still not extreme. There is room for price to rise or fall.
Click chart to enlarge. Chart courtesy of StockCharts.com.
The session for 14th of September completes with a lower low and lower high than the prior session. This daily candlestick may be the last candlestick of this small counter trend movement.
Overall the session completed with upwards movement, closing above the open. The rise in price was not however supported by volume, volume is lighter for this upwards day than prior downwards days. On it’s own this is slightly bearish, it suggests the low may not yet be in place. If price continues lower it may find support about 1,310.
Overall though the volume profile remains more bullish than bearish; the rise in price to the last swing high of 6th September was supported by volume, and the following fall in price is not.
On Balance Volume is giving a reasonable bullish signal today with a small move up and away from the yellow support line. This line is very slightly adjusted now to sit on the last low. OBV may find some resistance at the purple line. This bullish signal supports the Elliott wave count.
RSI is just below neutral and exhibits no divergence with price to indicate any weakness.
ADX is still declining indicating the market is not trending. ATR agrees as it too is overall flat to declining. Bollinger Bands agree as they remain tightly contracted.
Price is still range bound, with resistance at 1,375 and support at 1,305. During this range bound period it is three upwards days which have strongest volume suggesting an upwards breakout is more likely than downwards. This supports the Elliott wave count.
Stochastics is close to neutral. It did not reach overbought at the last swing high, and price did not reach resistance. A range bound approach may expect price to continue higher from here and only to end when price is at or very close to resistance, and Stochastics is overbought at the same time.
This analysis is published @ 07:51 p.m. EST.