Downwards movement was confirmed quickly with a channel breach of the hourly chart. Thereafter, a red candlestick was expected for Tuesday’s session.
Summary: I judge it 60% likely that minute wave ii is only halfway through and may continue for another one or two days to either move just sideways or maybe end about 1,196. I judge it 40% likely that minute wave ii is over and a third wave within a third wave may begin upwards. If the next 24 hours sees only choppy overlapping movement with low volume the first scenario will be correct. If the next 24 hours sees clear upwards movement with an increase in upwards momentum and increased volume the second scenario would be correct.
Click on charts to enlarge.
Main Daily Wave Count
There are more than thirteen possible corrective structures that cycle wave b may take. At this stage it is unclear what degree to label this big movement. Primary wave A (or W) is an incomplete zigzag.
Cycle wave b may be a flat correction where primary wave A is a zigzag. Cycle wave b may be a triangle where primary wave A is a zigzag. Cycle wave b may be a combination where primary wave W is a zigzag. Cycle wave b may be a double zigzag with the first in the double, primary wave W, incomplete.
When the big zigzag now labelled primary wave A is complete, it is also possible that cycle wave b could be over there with the degree of labelling within it moved up one degree.
When intermediate wave (C) is a complete five wave structure alternate wave counts will be required to manage the various possibilities of cycle wave b continuing.
A new high above 1,308.10 would invalidate the alternate and confirm this main wave count at primary and cycle degree.
The upwards wave labelled intermediate wave (A) fits only as a five wave structure, a leading expanding diagonal. Within a leading diagonal the first, third and fifth waves are most commonly zigzags, and the fourth wave should overlap first wave price territory.
Because intermediate wave (A) subdivides as a five, intermediate wave (B) may not move beyond its start below 1,131.09.
At 1,320 intermediate wave (C) would reach equality in length with intermediate wave (A). If price keeps rising through this first target, or if when it gets there the structure is incomplete, then I would use the second target. At 1,429 intermediate wave (C) would reach 1.618 the length of intermediate wave (A).
Because intermediate wave (A) is a diagonal then it is highly likely intermediate wave (C) will be an impulse in order to exhibit alternation. Intermediate wave (C) may end about the upper edge of the channel drawn about primary wave A.
This wave count sill has problems of structure within primary wave 5 of cycle wave a:
– within primary wave 5 intermediate wave (2) is a running flat with its C wave looking like a three and not a five.
– within intermediate wave (5) the count is seven which is corrective; either minor wave 3 or 5 will look like a three wave structure on the daily chart where they should be fives.
It is for these reasons that I will retain the alternate until price confirms finally which wave count is correct and which is invalidated.
Volume for downwards movement of minor wave 2 is lower than the prior upwards movement of minor wave 1. Tuesday’s session, another down day, shows lower volume which would be expected if this downwards movement is another small correction. Volume indicates strongly that the trend is up.
Minor wave 1 lasted seven days (no Fibonacci number) and minor wave 2 lasted a Fibonacci three days. If minor wave 3 exhibits a Fibonacci duration it may last thirteen days, which would see it end in eight more sessions (depends on how long the corrections within it last).
At 1,303 minor wave 3 would reach 1.618 the length of minor wave 1.
Draw a base channel about minor waves 1 and 2 as shown. Minor wave 3 may have the power to break through resistance at the upper edge of the blue channel.
Main Hourly Wave Count
Minute wave ii is confirmed as underway with a clear breach of the green channel drawn about minute wave i.
So far to the downside there is a complete three wave zigzag. This indicates minute wave ii may be unfolding as either a flat correction, combination or double zigzag.
If minute wave ii is a flat correction then within it minuette wave (b) must retrace a minimum 90% of minuette wave (a) at 1,222.68. If minute wave ii is an expanded flat (the most common type) then minuette wave (b) must be a 105% or more correction of minuette wave (a) at 1,225.19. There is no upper invalidation point for this main wave count for this reason.
If minute wave ii is a double combination then minuette wave (x) has no minimum or maximum length and must only subdivide as a corrective structure. Minuette wave (x) of a combination should be deep and may also make a new high beyond the start of minuette wave (w) at 1,224.35. The purpose of double combinations is to take up time and move price sideways. The second structure in the double may be either a flat or a triangle and would most likely end close to the same level as minuette wave (w) at 1,207.60.
If minute wave ii is a double zigzag then minuette wave (x) has no minimum length and it should be shallow and must subdivide as a corrective structure. The purpose of a double zigzag is to deepen the correction when the first zigzag does not move price deep enough, so double zigzags have a clear slope against the main trend and are not sideways movements. A double zigzag would most likely end about the 0.618 Fibonacci ratio about 1,196.
This main wave count expects either sideways movement for another one or two days, or downwards movement to 1,196 to end in another one or two days.
Minute wave ii may not move beyond the start of minute wave i below 1,178.59.
Alternate Hourly Wave Count
I would judge this alternate idea to be less likely than the main hourly wave count, maybe about 40% likely. Although second wave corrections within a third wave one degree higher may be more shallow and brief than second waves normally are, this wave count looks to be too brief. Movement since the low at 1,207.60 is unconvincing as the start of a third wave, and has breached the base channel drawn about minute waves i and ii. For these reasons this wave count has a lower probability.
The pink channel drawn here is a base channel about minute waves i and ii, and is not the same as the green channel on the main hourly wave count.
If minute wave ii is over then at 1,282 minute wave iii would reach 1.618 the length of minute wave i.
This wave count requires the following four things over the next 24 hours before I have confidence in it:
1. A green candlestick for the next session.
2. An increase in volume for the next session.
3. Clear upwards movement on the hourly chart, as a five wave structure and not a three.
4. An increase in upwards momentum.
If minute wave iii has begun then within it no second wave correction may move beyond the start of its first wave below 1,207.60. Any movement by any amount at any time frame below this point fully invalidates this alternate wave count and would provide confidence that minute wave ii is continuing.
Alternate Daily Wave Count
This alternate wave count sees Gold as still within a primary degree downwards trend, and within primary wave 5 intermediate wave (3) has begun.
At 957 primary wave 5 would reach equality in length with primary wave 1. Primary wave 5 may last a total Fibonacci 55 weeks. It is now beginning its 39th week.
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 was the first warning this wave count may be wrong.
This wave count still has a better fit in terms of better Fibonacci ratios, better subdivisions and more common structures within primary wave 5, in comparison to the main wave count above.
Within intermediate wave (3) minor wave 1 is a long extension. Within minor wave 1 minute waves iv and ii are grossly disproportionate, with minute wave iv more than 13 times the duration of minute wave i. This also reduces the probability of this wave count.
Although the invalidation point is at 1,308.10, this alternate wave count should be discarded long before that price point is reached. If the maroon channel is breached again by one full daily candlestick above it and not touching it then I would discard this alternate wave count.
A new low below 1,131.09 would confirm that intermediate wave (3) down is underway.
Minor wave 2 would now be a completed zigzag. If this alternate is correct it should show itself this week. It now expects a big increase in downwards momentum as a third wave at two degrees begins to gather momentum. An increase in volume as price moves lower would support this wave count. A new low below 1,178.59 would be a strong indication this wave count may be correct.
It is concerning that volume for Tuesday’s down day is lower. Volume continues to not support this wave count, and is a strong indicator that this wave count is wrong.
This alternate wave count remains technically possible. Because the implications are important I will continue to publish it at this stage.
This analysis is published about 05:19 p.m. EST.
Checking to see if this chart downloaded clear
EU
(QE) started first round, just as the US has ended. This has the FMOC worried it
will strengthen the dollar which is affecting domestic exports so they think an
interest rate increase will slow the dollar down Throw in the fact we have just entered an election cycle, Iran
peace outlook is on the up, Greek debt restructured. To me it looks like a
completely different climate than it did in January. The geo political and
economic outlook favor an interest rate hike right around the date with which 957 primary wave 5 would reach equality in
length with primary wave 1. Primary wave 5 may last total Fibonacci 55 weeks.
It is now beginning its 39th week, plus or minus 2 weeks. Translation: Interest rate hike sometime in June July also correlates
with the ALT bottom. Any thoughts?
GLD still looks bullish to me. See attached chart.
Mark
Your chart, she’s a beauty! A picture is worth a thousand words. Makes me more confident buying back into GDX near day low after selling at a profit.
Agreed
This chart very bullish for DUST. As we gap down over night. This will become more apparent!!
Don’t see much in it for the longs above 1206-08 just yet with 1215 on the outside subject to rise through 1204…. A break below 1188 or perhaps 1190 will probably negate the short term uptrend…. Gold price was looking to top, I wonder if it has! Tomorrow is another day, lets see how this closes today.
Lara
Is 1,196 still the lower range of trend line and 1,222 – 1,225 still upper zone before drop again to 1,207 to complete minute wave ii or has today’s gold movements changed the bottom and upper targets or a new alternate daily wave count for the next few days?
Yes, there’s a nice channel about minute wave ii now. It’s sitting perfectly on the lower edge.
I’m seeing minute wave ii as over now, or extremely close. Look at the blue base channel on the daily chart, price should find strong support right here now that its touching and actually slightly overshot the line.
I’ll upload a chart. Its easier than writing a bunch of words. Then I’m off to write it up.
Lara thanks
Bullish enough for me to buy GDX back cheaper than sold it for.
Lara, I’m loving the quick bullish chart thanks a lot$$$
Gold hourly from this morning for micro count is here:
https://www.dropbox.com/s/lh6wvzip4ud4py7/gold%20hourly.png?dl=0
Richard thank you for sharing the micro count. Been hoping somebody had it.
I’m looking at this post now.
Well, I’m going to go clean the garage. Not much happening here.
🙂 Well said. after all this volatility nothing really happened. I feel comfy with longs.
Alex77, I see where you’re coming from. I’m holding long too. 2nd wave corrections can be violent at times. It’s all worth it if you’re still able to ride the 3rd wave though…let’s see, hope, pray…etc… I’m wondering if sentiment pushes up gold if earnings season starts off weak…with the thought that the Fed will then wait and 3rd wave up kicks in….????
http://www.marketwatch.com/newsviewer
Headlines from FED FOMC minutes here some are bearish for gold
I sold in first minute when GDX was still high.
Well trading off headlines is surely not the right way to go .
you haven’t learned Richard after all this time?
For intraday, Richard, you did very well…took a gain and many sold on fear…if gold is to remain in Lara’s bullish count, this would probably be near a good place to reenter…I don’t know where gold is going, but gold volatility, $GVZ is down, which is, to me, a sign that this could be a fakeout…I’m awaiting Lara’s guidance.
I bought GDX at close last night and sold 2:00:33 33 seconds after FOMC release for a profit then bought DUST at 2:04 and sold it few minutes later for a profit. Gold is still trending down since FOMC and the market is more bearish miners. Holding nothing now and will wait for Lara comment before close. If she is still bullish gold then I’ll Likely buy GDX back lower than now and where I sold it. Meanwhile no risk and have 2 sale profits in my pockets.
Patience is needed. I was too impatient and bought @1202. Lara should step in shortly and shed some light on the wave count.
JNUG limit order filled at 18.95. I am about 50% long right now.
so we’re looking for a break of 1196 to confirm the ALT now?
that correct?
Not according to Lara no . But I personally wouldn’t like to see gold close on a low today .
light volume sell-off so far…
Yeah , I don’t know . Something feels off to me . But could be because I am positioned in for upside 🙂 This supposed minute ii is taking took long to complete . Lara , is there anyway to see the recent move down as impulsive ? I am getting paranoid .
disagree on how long it’s taking to complete. However, low should be in now. Patience is a virtue here.
I’m not able to see this downwards move as an impulse. I’m seeing it as a double zigzag which has an absolutely perfect fit. With that triangle there in what would be a second wave position (even if you could see a five for a first wave before it) that makes it really unlikely. If my triangle is correct, and it’s supported by MACD.
Volume is up, but still not higher than the last green candlestick day. Everything points to this downwards move being a correction within the larger trend, not the start of a big new downwards trend.
Oh also, I posted a chart above
Invalidation is at 1178.
thanks, ideally we close at ~1196 and then gap down over night to finally confirm the ALT and get some clarity
I believe that from today’s high at 1212.42 at 3:10 am there has been a 5 wave count down to today’s low of 1200.89 at 12:51 pm. Any comments?
Agreed. Looks like dzz is complete.
Just a guess : If X was a triangle ( is that a possibility ? ) E ended at your 1212.42 ( i have 1212.22 ) , then the wave you are looking at started from 1211.88 and can be a 3 . But I am really not sure of anything .
Sorry E ended at 1211.88 I mean .
triangles are typical of 4th or B waves.
Not X ? Where is the dzz you mention then ?
Yeah it is not dzz. Corrected it. Just came home and i am a bit weary. Nonetheless i think that at least first zig zag is complete.
That’s exactly what I have. X waves are most often zigzags but they can be any corrective structure. A triangle for an X wave in a double zigzag makes perfect sense; they’re shallow. It fits the purpose nicely.
That was only the third subwave of Y.
The last several FOMC Minutes releases were non events
http://www.federalreserve.gov/monetarypolicy/fomccalendars.htm
Today news – Ahead of the release of FOMC minutes, New York Fed President William Dudley suggested that the bar for raising rates in June is high, given recent signs of softness in the U.S. economy.
Fed minutes ahead: The minutes of the Federal Open Market Committee’s March meeting will be released at 2 p.m. Eastern. Nour Al-Hammoury, chief market strategist at ADS Securities, said because the minutes won’t cover the recent weak jobs report, a change in guidance isn’t likely. Therefore the report could turn into a “nonevent”, he said in a note.
Federal Reserve Gov. Jerome Powell, in a speech, said he expects economic conditions to support a rate hike later this year. Powell also said he wasn’t troubled by equity valuations and that the Fed was unlikely to put “its toe in the water” and declare overly high stock prices to be a justification for a rate hike.
U.S. stocks firmed up Wednesday after oil jolt down due to increase in US supply and record Saudi output.
US dollar dropping since 11:00 am Wednesday
I’m going to add to or adjust my position at 2:00 pm, while watching a TOS gold chart that also compares gold (/GC) to the US dollar index ($DXY).
Last few FOMC events both /GC and $DXY moved very fast in first minute giving clear signal of direction. Like gold jumped $10 in 2 minutes and $DXY dropped 1% in 2 minutes. Only had time to read one headline at
http://www.marketwatch.com/newsviewer
This is a very fast news source.
Any ideas ?
There’s still no hope for the gold market- Apr 8, 2015 5:40 a.m. ET
http://www.marketwatch.com/story/theres-still-no-hope-for-the-gold-market-2015-04-08?mod=MW_story_recommended_default&Link=obnetwork
Sentiment suggests the yellow metal has a tough road ahead of it
Be careful on timeframe. Gold may have no hope, but still could bounce to Lara’s first target in next 2-3 weeks before reversing.
I suspect gold will be giving everyone a lot of hope before the bottom falls out. Markets like to suck everyone in first so I too am looking for Lara’s first target….that will get the goldbugs ultra giddy. COT data favors a bounce from here too.
Minor wave 3 may end in eight more sessions at 1,303. Along the way up to that target two corrections down, minute waves ii and iv, should show up on the daily chart.
Live US Dollar index (CFD) Interesting how US dollar and gold are inverse.
http://www.investing.com/quotes/us-dollar-index-streaming-chart
I will probably add to NUGT if that gap gets filled down to 10.56.
Got filled at 10.54. We’ll see how this plays out.
I’m in as well…good luck to us…
Another decent trader I follow just covered his gold short on the last drop–he still has a bearish stance, but he’s on the sidelines right now…
NUGT daily chart looks quite bullish to my eyes. See my notes on attached.
I agree, can’t fight the trend. The concern I have is a possible head and shoulders formation in gold…neckline at 1131 and 1140…we could bounce significantly and then drop, so I’ll be more cautious at the 1270 level…
I think 1196 area is coming, I have a few limit orders in the upper 18’s for JNUG waiting.
I agree, that remaining gap is ominous, hence I’m scaling into my position.
Movement under 1,207.60 has invalidated the alternate hourly wave count. Dropped down to 1,204.93 at 8:30 am so only have Main hourly wave count.
Agreed. One less thing to monitor. The immediate concern is whether the flat or the ZZ is playing out. Both call for a price rise, albeit to different levels, and then a drop to complete minute 2.
So, at this point, if price doesn’t change much before the FOMC minutes, there’s a good chance that the minutes may take us to the top of the (b) or (x) wave, before coming down again to complete minute 2. Anyone else see it this as likely?
You may refer to my posts to papudi below in which I analysed both movements real-time. I view that for the flat, the b wave is yet to come at around 1223, but for the ZZ, the x wave is already complete and we are now heading lower. So, there can be a divergence at the Fed minutes; flat says it is may be dropping and ZZ says minute 2 would have ended, and price will be staging a magnificient rise.
In other words, if price is closer to current level you’d expect minute 2 to be over as a double zigzag, but if it has by that time reached 1222.48, then it may temporarily plunge to complete the flat? Thanks
Specifically, my marker is currently 1210.05.
Price must rise above 1210.05 for the flat, towards 1223.
Price cannot rise higher than 1210.05 (at worst, 1214.36) because that marks the 2nd subwave within the y wave. 1214.36 is the beginning of the y wave.
Thank you, Tham.
This morning’s action is what I had hoped to see on the bullish front. Specifically, sideways/slightly weak action ahead of Fed minutes to take up time and help reset STO/momentum.
That STO must be heading down to 20
We may end down for the day yet and reverse overnight or tomorrow. We will see, but I agree, we do need to let off a little bullish sentiment yet and since we are so close to filling that gap….
Don’t have to worry about the alt hourly wave count any longer.
Can’t but help wonder if we will get a spike down to $1196 this afternoon after Fed minutes are released. Sure looks like a DZZ is forming with X wave being a triangle. The quick spike down to $1196 would complete WXY.
Both Bulls and Bears may need quick trigger fingers today.
Either way, I’m 90% sure we will know which daily wave count is correct by the end of the day. However, I’m 80% sure the main daily wave count is correct and already positioned for it. Will add if $1196 holds. just wondering if that will kick off big downwards movement in the S&P?
I’m also leaning towards 1224/1244
I’ve been trying to figure that out too. Based on the bounce back up here these last few days in S&P, I get the sense that gold and stocks will both rally as the dollar drops.
I hope you are right . I am long since 1165 but the way price seems to be rolling over has me very nervous .
chapstick , do you have any technicals beside ew that are supporting upside ?
absolutely no volume on the selloff. However if $1196 gives way this PM on heavy volume, daily alt count is correct. I do not expect this.
Alternate hourly has already been invalidated below 1207.60 so can’t become validated. Gold at 8:30 am low 1204.93 low. Main hourly invalidation is below 1178.59.
“daily alt”
If this DAILY alternate is correct it should show itself this week. It now expects a big increase in downwards momentum as a third wave at two degrees begins to gather momentum. An increase in volume as price moves lower would support this wave count. A new low below 1,178.59 would be a strong indication this DAILY alternate wave count may be correct.
Alternate hourly was invalidated with a drop below 1207.59, but not the alternate daily.
thanks for the info on volume. Important point.
I think that lack of X wave for such a long time makes scenario of rather steep movement more likely. It is absolutely possible that there will be no more upside movement before it goes to 1196 or even 1190…
Since 6Apr15 Gold price has been trading in a narrowing range; a breakout would likely occur! Very difficult to try and pin this which way gold price will go.
The alt daily wave count leaves that possibility open.
With 1208/06 holding, it appears Gold price is poised to make a run up for 1220/21 unless Gold price is curtailed under 1216.
TKL
Time to initiate small bite of trades on both side just before 2:00 PM or a trade which cancels other if one gets filled.
Time to think about that today????
Hi papudi. I’m still trying to figure this out.
Minute 2 appears to be 1224.35 – 1207.59 (minuette a) – ongoing.
Minuette b so far goes 1207.59 – 1214.36 – 1205.31 as of now. This means minuette b is an expanded flat, and would terminate around 1233 (2.618 retracement of subminuette a).
Minute 2 would then be a regular flat, ending slightly below 1207.
This will be correct if there is strong momentum up, and going past 1217-1218, which is the likely X wave of a DZZ. If the rise fails to take out 1217-1218, then the DZZ is correct, and we will end up with 1195/1196.
I’ll be watching the rise towards 1217-1218 for clues.
Price has now dropped to 1204.93.
I am thinking another possibility is that DZZ is underway 1224.35 – 1207.59 – 1214.36 – ongoing. (The X wave ended earlier rather than at the supposed 1217-1218).
The Y wave is underway and 1204.93 is part of the third subwave within it. If so, minute 2 could complete in time for FOMC minutes release (depending on the speed of the 4th wave), and this will be followed by a sharp rise up in the form of Minute 3 towards 1303.
So both hourly wave counts show probable movement up to 1222 min. I wonder if the market is going to anticipate that before the FOMC?
On alt daily Lara has a blue TL below the maroon TL It appears this blue TL is providing first resistance around 1216.
Post 2:00PM will blow the price in either direction.
We will know which wave is active soon today???
Thanks Papudi, I’ll keep an eye on the 1216 level.
It’s possible that 1216 could be the top of the x wave in a dbl zigzag leading to 1196 if neg news for gold.
The Fed seems to be the biggest driver of large gold moves. Ironically, we have the Fed minutes tomorrow. This suggests minute ii is over and we will see strong move upwards tomorrow.
Mark, your charts convinced me to sell my final third of JNUG late yesterday and enter a small JDST trade. Bought at 9.05 and sold today at 9.60. Thanks for the contributions. I’m back into a first long position in JNUG, although I believe we do have some downside left. I’ll look to add more in the next day or two.
Glad the charts were helpful and congrats on the trade. Lara’s analysis really seems to give me a lot more clarity on my independent, non-Elliott analysis. I’m long as well in NUGT into the close today and here is my hourly GLD chart which looks very bullish provided the structure is maintained around support/resistance levels. Looks like March may have built a nice cup with handle which just broke out and backtested. If the breakout level doesn’t hold I will need to rethink my analysis.
Would have been better if the STO had made it all the way down to 20 already.