A new low below 1,204.53 has confirmed the alternate hourly Elliott wave count. This is now the only hourly Elliott wave count.
Summary: The middle of intermediate wave (3) has most likely begun. A breach of the green channel on the hourly chart would add confidence to the wave count. I will have full confidence that minor wave 3 has begun with a new low below 1,189.64. The target for minor wave 3 to end is at 1,055. Along the way down there should be two corrections for minute waves ii and iv which should show up on the daily chart.
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Main Daily Wave Count
This main wave count sees Gold as still within a primary degree downwards trend, and within primary wave 5 intermediate wave (3) has begun. At 956.97 primary wave 5 would reach equality in length with primary wave 1. For Silver and GDX this idea, that the primary trend is down, is the only remaining wave count. This main wave count has a higher probability than the alternate below.
The maroon channel about cycle wave a from the weekly chart is now breached by a few daily candlesticks and one weekly candlestick. If cycle wave a is incomplete this channel should not be breached. The breach of this channel is a warning this wave count may be wrong, and so I will still retain the alternate.
Draw the maroon trend line on a weekly chart on a semi-log scale, and copy it over to a daily chart also on a semi-log scale (see this analysis for a weekly chart).
Within primary wave 5 intermediate wave (1) fits perfectly as an impulse. There is perfect alternation within intermediate wave (1): minor wave 2 is a deep zigzag lasting a Fibonacci five days and minor wave 4 is a shallow triangle lasting a Fibonacci eight days, 1.618 the duration of minor wave 2. Minor wave 3 is 9.65 longer than 1.618 the length of minor wave 1, and minor wave 5 is just 0.51 short of 0.618 the length of minor wave 1.
Intermediate wave (2) is an expanded flat correction. Minor wave C is a complete expanding ending diagonal. Within an ending diagonal all the sub waves must subdivide as zigzags. The fourth wave should overlap first wave price territory. Expanded flats are very common structures and ending diagonals are more common than leading diagonals.
This wave count has more common structures than the alternate wave count, and it has a better fit.
A new low below 1,131.09 would confirm that intermediate wave (3) down is underway.
Intermediate wave (2) may not move beyond the start of intermediate wave (1) above 1,345.22. If this invalidation point is passed this wave count would be fully invalidated.
Within intermediate wave (3) minor wave 1 is a completed impulse lasting 18 days. Minor wave 2 is a completed double flat correction which lasted 9 days, exactly half the duration of minor wave 1. Because this is a second wave correction within a third wave one degree higher I would expect it to be more shallow than normal.
Looking at the duration of minor degree waves within intermediate wave (1): minor wave 1 lasted 18 days, minor wave 2 lasted 5 days, minor wave 3 lasted 31 days, minor wave 4 lasted 8 days, and minor wave 5 lasted 2 days. Corrections do tend to be more brief than an actionary wave of the same degree, so for minor wave 2 within intermediate wave (3) to be over in 9 days looks perfectly normal.
I am redrawing the channel about minor waves 1 and 2 as a base channel. Minor wave 3 should have the power to break through support at the lower edge. Along the way down upwards corrections should find resistance at the upper edge. Copy this channel over to hourly charts.
So far from the end of minor wave 2 there is a five down followed by a three up. This adds a little confidence today to this wave count; if the downwards trend has resumed then we should be seeing movements subdivide as fives down and threes up.
Upwards movement is finding resistance at the upper edge of the corrective channel about minute wave y, the second flat in the double of minor wave 2. Downwards movement is finding support just above the lower edge. I would expect an increase in downwards momentum when downwards movement manages to break through support. When this channel is clearly breached with at least one hourly candlestick below it and not touching it then I would have increased confidence in this wave count.
A new low below 1,189.64 could not be a second wave correction within a continuing C wave up for minor wave 2, and so a new low below 1,189.64 would provide full confidence in this wave count.
Minor wave 3 should show a strong increase in downwards momentum beyond that seen for minor wave 1. If the main daily wave count is correct then minor wave 3 should provide confirmation that the trend at primary and cycle degree remains down for Gold.
At 1,055 minor wave 3 would reach 1.618 the length of minor wave 1.
It is reasonably likely that the first correction of minuette wave (ii) is over. However, if it continues further sideways as a double combination, double zigzag or a flat correction then it may not move beyond the start of minuette wave (i) above 1,223.33.
Alternate Daily Wave Count
At this stage I judge this alternate wave count to have a lower probability. The structure of downwards movement, and momentum, will determine which wave count is correct over the next few weeks. At this stage they both expect more downwards movement so there is no divergence in the expected direction.
This wave count sees a five wave impulse down for cycle wave a complete, and primary wave 5 within it a completed five wave impulse. The new upwards trend at cycle degree should last one to several years and must begin on the daily chart with a clear five up.
The first five up may be a complete leading expanding diagonal. Within leading diagonals the second and fourth waves must subdivide as zigzags. The first, third and fifth waves are most commonly zigzags but they may also be impulses. This wave count sees minor waves 1, 3 and 5 as zigzags.
Leading diagonals are almost always followed by deep second wave corrections, sometimes deeper than the 0.618 Fibonacci ratio. It is possible now to see intermediate wave (2) as a deep 0.67 single zigzag. If it is over it may have lasted just a little under half the duration of intermediate wave (1).
My biggest problem with this wave count is the structure of intermediate wave (2) within primary wave 5. This is a rare running flat but the subdivisions don’t fit well. Minor wave C should be a five wave structure, but it looks like a clear three on the daily chart. If you’re going to label a running flat then it’s vital the subdivisions fit perfectly and this one does not. This problem is very significant.
Within intermediate wave (5) minor wave 3 looks like a three on the daily chart, where it should be a five. This movement may also be labelled with minor wave 3 ending higher and minor wave 5 looking like a three. Either way, one of the actionary waves within this downwards movement will look like a three and not a five which does not have the “right look” at the daily chart level.
Intermediate wave (2) may be an incomplete zigzag, which subdivides 5-3-5. The subdivisions within intermediate wave (2) for this alternate are exactly the same as for this movement on the main wave count which sees a first, second and now third wave unfolding subdividing 5-3-5.
For this alternate wave count minor wave C down must subdivide as a five wave structure. The hourly chart would see the subdivisions exactly the same as the main wave count above, so to keep the number of charts at a minimum I will publish only one. For this alternate at 1,159 minor wave C would reach 0.618 the length of minor wave A.
For this alternate the channel is drawn in the same way, but here it is correctly termed a corrective channel. Minor wave C should find support and end at the lower edge of this channel. The main wave count expects the power of a third wave to break below support at that trend line. How price behaves when it gets to the lower trend line will provide an indication of which wave count is more likely at the daily chart level.
Intermediate wave (2) of this new cycle degree trend may not move beyond the start of intermediate wave (1) below 1,131.09.
This analysis is published about 03:16 p.m. EST.
latest edition published
Even if we get a bounce is it going to be finished and down to 1190 by tomorrow morning…
Gold just hit 1,198.22 at 2:40 pm. If gold closes down today is it ready for a multi-day correction up now?
I think we’ll get 2 scenarios for the next wave count from Lara….one up and one down…
Really starting to look like GDX is going to jump off a cliff. 3 black crows and deteriorating technical indicators….might gap down tomorrow. Thoughts?
Gold doesn’t seem too interested in moving down yet. Can anyone pls advise if their uptodate wavecount still looks bearish? Ty
Please refer to Lara’s main hourly count. At the close yesterday, price was dropping in Minute 3. I consider that the bottom of the red candlestick at 1201.78 is micro 1 of minuette 1. The upwards movement is a 3-wave micro 2. We have completed two waves already at 1209.07 and 1201.98 respectively. The third wave is now underway. If this count is correct, downwards movement shall resume after its completion. The current upwards movement cannot exceed 1215.15 which is the beginning of Minute 3.
Having dealing with those in the physical markets and new developments in these metals i do not see the markets going down as suggested. You might care to listen to some of the interviews on King World News from Andrew Maguire. Big changes are afoot.
King World is a platform primarily for goldbug shills constantly bleating about some big political or economic event that is going to make gold shoot to the moon. Someday they will be correct.
Well we will see.
i am not going to write a book here about why G&S are undervalued or what will inevitably happen over the coming year.
The Chinese, Russians and Indians have been buying up gold like no tomorrow. COMEX contracts are naked and they cannot deliver.
It is a documented fact the precious metal markets are manipulated.
Those who deny this have either not done the research or they are shills.
Yes pm market is manipulated, china, russia, india, naked shorting, comex fraud have been discussed on king world for years, the sky is always going to fall (buy gold buy gold buy gold) and probably someday will.
Shills make their money shilling so can not be trusted. IMO EW in hands of a skilled practitioner is best possible source of unbiased pm market advice.
The above talk has been in the bug circle for many years. China and India have been buying gold for many years, Yet from 2012 to date gold has dropped. One more item is missing from above reasons: negative GOFO and backwardation has been in the market since 2013.
I like to stay with Lara’s analysis for direction of gold.
Do you see the markets going down temporarily so we can trade them for a day or week or month?
Which day or week or month will gold rocket up?
Well no-one knows which day or week things will happen b/c no-one actually holds all the card. This afternoon 5000 GCJ5 contract were sold into the market just before Non-Farm Employment Change. This triggered 4500 contracts to be sold in the first 10 minutes after release of this data. The data was a miss. Price dropped below 1200 to meet a wall of buyers. The key players have decreased their short positions very significantly. The East just keeps buying. The paper markets in London are broken. It is almost impossible to get delivery, you will be pushed into a cash settlement b/c the gold just is not there.
There are changes imminent but some are not in the public arena just yet so i am not at liberty to say.
No offense, but you sound brainwashed into believing some wild theory about why it is your trade didn’t work. A word of advice – the market is never wrong. All you have to do is check your trading account. When you’re right, it goes up, and when you’re wrong, it goes down. When you’re wrong, it is best not to blame anyone just get out of the trade and start over. Best of luck to you
What trade?
Best of luck to you too.
So…. the key players have decreased their short positions very significantly?
who are the keyplayers? your information is not serious. just marketscreeming.
This is bullshit . the keyplayers still hold the highest shortposition since two years after a 100$ drop. Did you ever take a look in the COT-Report? Do you know who the 4 big traders respectively the big 8 traders are?
Your paper- and physicalmarket storry is old.
The banks who own the fed know the physical market very well believe me and they know what they are doing.
JP morgan still holds 50 days of world production short in silver. there is no covering seen yet in the report.report from 27 feb.
if you look at the cot data you see that there is a physical surplus.
You see that the large specs longpositions and the producers shortpositions are rising since the first dip of 1200 Dollars summer 2013.
This normally indicates new bullmarket but there is one difference to 1999 to 2011 where this positions were rising too. the price is falling now. so we should have a physical surplus coming from the western central banks. the goldmarket is 2 parts. the physical and the futuresmarket. you can set the priceaction relative to the positionaction. then you know what was going on in the physical market in the same timeframe. we still have no shortcovering from the big players and a lot of longposition to drop. the big players need a distribution phase. this will come when the longpositions are dropped and evry idiot can see in the chart that gold have to go down. then shortsellers come and buy the positions of the big players.
the manipulation on the futurmarket is only to defend marks in the chart but if you would manipulate over futuremarkte to get price down the whole world market would go against you. so people who say manipulation is in papermarkte dont not even understand a little piece how this market and the manipulation works. the manipulation goes over the physical market. in bearmarket rallys the sell physical gold in the market and at the end of the rally the manipuators rise their shortpositon on the futuremarket to extreme levels and defend that leve until the market begins to turn. the big downward days are no shortsellings. the downward days are longdrops. look at the cot data to understand what i try to explain. sry for my english
i was talking about the COT short position in GC which has sharply dropped.
The banks know the paper market. You do not know what is going on behind the scenes in the physical market. This is the point. The physical market is moving out of London and COMEX b/c it is not a physical market, it is a false market, which is why i made my first post. London will no longer fix price. This is happening this year. This is starting to happen now.
Believe what you like.
Thanks Tham, David…
Markets that refuse to go in one direction (below 1200 in this case) eventually go in the opposite direction (up in this case). The question in my mind is: does EW say it is impossible for for the market to go up here or just say it is unlikely? If it is possible to go up, and it does, how will Lara then adjust her labeling to match it? That is why I asked the question last night (see below, and there is now a chart) about a possible ending diagonal Feb 17-24.
EW is based on probabilities not absolutes.
Now at 11:55 am just regular retracing/correction happening since 10:07 am low of the day, when it went below 1,200 down to 1,198.33.
Anyone have a guess how high up retrace today?
Gold bugs hoping the Apple watch can boost gold
http://www.businessinsider.com/apple-watch-edition-gold-market-2015-3
Six EW charts – When Will the Next “Rally” Develop in Silver & Gold
Avi Gilburt – Tuesday, 3 March 2015
http://news.goldseek.com/GoldSeek/1425415435.php
hi Richard. Was glad you posted some info that I hadn’t seen before. But when I clicked on the link the site doesn’t load. Is it working for you?
http://news.goldseek.com/GoldSeek/1425415435.php
Six EW charts in case link above doesn’t work as may be temperamental.
Lara, in the Alternate Daily, where you have v-x-y for Feb 17-24, could that be seen as an ending diagonal also?
I started to reply…. and I’m actually rather confused as to exactly where / how you are seeing a diagonal in there.
Please upload a chart of where you see the diagonal then I can know exactly what your suggestion is and I can see if it meets EW rules or not.
Lara, here is a 5-wave contracting ending diagonal marked on one of your old hourly charts. If I squint right, I can see zigzags (and double zigzag for wave 3) allowing for a few extended waves and 5-th wave truncations inside the zigzags.
Sorry I do not have software to make a pretty chart.
.
EWP 10-th edition pg 87 “Waves 1,2,3,4 and 5 of an ending diagonal…always subdivide into zigzags”. My wave 1 might be the weak part of my case, but I think it is arguable.
No worries, I just need to see the general idea.
I’m charting it and checking the subdivisions. Your wave 1 is fine, it will subdivide as a single zigzag.
I have the fifth wave truncated, that’s a little more unusual for fifth waves of ending diagonals.
The third and fifth waves really don’t subdivide as single zigzags, those movements fit as double zigzags. EW rules can be interpreted to allow for this, but I don’t like it. I would argue that EW rules state all the sub waves must be zigzags, and that this should mean single zigzags because it doesn’t clearly state multiple zigzags are acceptable.
The wave lengths work, but the fifth wave falls short of the 1-3 trend line.
Finally, the second wave fits better as a five wave movement than a three.
Overall, I guess it’s possible but I would not be happy to publish it, I think it has too many problems which give it a very low probability.
Thank you for taking the time for that detailed explanation.
Thank you Lara for getting this update out prior to market close.