Last analysis expected a small sideways correction to unfold and remain above 1,327.30.
Price has moved lower in a small range, which fits expectations.
Summary: Look out now for surprises to the upside. A small sideways correction may complete about 1,338, remaining above 1,327.30. When the correction is done, another wave upwards should be about 24 in length. The long term target for the Elliott wave count for a third wave to end is at 1,585.
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 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. 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), the upcoming correction for 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 may find some resistance on the way up about the upper edge.
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
Minor wave 1 is unfolding as a more common impulse.
Within minor wave 1, so far minute waves i, ii and iii are complete. Minute wave iv is close to completion. There is no Fibonacci ratio between minute waves i and iii, so it is more likely that minute wave v will exhibit a Fibonacci ratio to either of minute waves i or iii. The most common ratio for a fifth wave is equality in length with the first wave, so minute wave v would most likely be 24.37 in length.
Minute wave ii was a quick shallow 0.43 zigzag. Minute wave iv is exhibiting some alternation as an expanded flat, but the depth may not exhibit alternation. Minute wave iv may end close to the 0.382 Fibonacci ratio about 1,338.
Minute wave iv may not move into minute wave i price territory below 1,327.30.
When minute wave iv is complete, then minute wave v should move at least slightly above the end of minute wave iii at 1,351 to avoid a truncation.
When a five wave impulse upwards is complete for minor wave 1, then a multi day correction for minor wave 2 should unfold. It may be relatively deep. Minor wave 2 should offer a good opportunity to join the trend at a good price.
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 unfolding as 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 made an important new low, slightly below the prior swing low of 18th of July. Price thereafter bounced up strongly from support about 1,310 – 1,305. Last weekly candlestick comes with lighter volume than the week prior.
To see what is happening here we need to look inside last week at daily volume.
The long lower wick of last weekly candlestick is bullish.
On Balance Volume is giving a bullish signal last week as it found support at the yellow trend line and has moved up and away from that line. OBV may find some resistance at the purple line.
RSI is not extreme. There is still room for price to fall or rise. There is no divergence between price and RSI at the weekly chart level to indicate weakness.
Click chart to enlarge. Chart courtesy of StockCharts.com.
The strong volume spike shown on yesterday’s technical analysis chart has disappeared, which was expected.
Volume for three upwards days still shows a healthy increase. The rise in price has good support from volume. This supports the Elliott wave count.
Wednesday’s session completes a small red daily candlestick with substantially lighter volume. The fall in price does not have support from volume. Again, this gives good support to the Elliott wave count.
In the short term, for the last four days the volume profile is very clearly bullish. More upwards movement should be expected.
The bullish signal from On Balance Volume with a break above the purple line remains valid. If price moves lower, then OBV should find support now at this line, so this may assist to halt the fall in price.
RSI is not extreme and exhibits no divergence with price at this stage to indicate any weakness.
ADX is now above 15 and rising, indicating a trend is in the very early stages. The trend is up with the +DX line above the -DX line.
ATR has declined today, but one day of decline is not enough to indicate an end to the trend. ATR has shown some increase from the 1st of September, which may be the early stages of a new trend.
Stochastics is returning from oversold. It is not yet overbought. There is room for price to rise further.
Bollinger Bands are beginning to widen as some volatility returns to the market.
Overall, this classic technical analysis strongly supports the Elliott wave count.
This analysis is published @ 07:03 p.m. EST.