This Elliott wave count expects Gold is within a grand super cycle correction.
HISTORIC ANALYSIS: 1833 – 2016
Data used for the chart above is averages for the year. It does not include high / low. Note the chart scale is a logarithmic scale. Data on this chart is only from 1833 to 2016. Price action from the all time high in 2011 is analysed on the monthly chart below, and in more regular weekly chart analysis.
This wave count expects Gold is within a grand super cycle fourth wave correction. Super cycle wave IV may not move into grand super cycle wave I price territory below 21.73.
Grand super cycle wave III lasted from 1931 to 2012, 81 years. This is about one generation, so this duration looks about right.
Ratios within grand super cycle wave III are: super cycle wave (I) (17.81 in length) has no Fibonacci ratio to super cycle wave (III) (581.17 in length), and super cycle wave (V) (1,397.94 in length) is 123.56 short of 2.618 the length of super cycle wave (III), an 8.8% variation (I consider less than 10% an acceptable ratio).
Within grand super cycle wave III, super cycle wave (I) lasted a Fibonacci 5 years, super cycle wave (II) lasted a Fibonacci 13 years, super cycle wave (III) lasted 31 years, super cycle wave (IV) lasted a Fibonacci 21 years, and super cycle wave (V) lasted 11 years.
Ratios within super cycle wave (III) are: cycle wave III (125.05 in length) has no adequate Fibonacci ratio cycle wave I (9.70 in length), and cycle wave V (487.72 in length) is 41.99 short of 4.236 the length of cycle wave III, an 8.6% variation.
Within super cycle wave (III), cycle wave I lasted twenty years (just one short of a Fibonacci twenty-one), cycle wave II lasted a Fibonacci one year, cycle wave III lasted a Fibonacci five years, cycle wave IV lasted a Fibonacci one year, and cycle wave V lasted four years.
The cyan trend lines are a best fit only. This movement does not fit neatly into an Elliott channel, but then Gold’s impulses often do not due to their curved shape forced by a strong fifth wave.
If grand super cycle wave IV ends within the price territory of the fourth wave of one lesser degree, then it would reach down as low as 612.56 to 271.04. It would be most likely to end close to (a bit above) the end of the fourth wave of one lesser degree, so just above 271.04. This is most typical of fourth waves.
A word about durations of corrective waves. Notice that corrective waves are usually quicker than the actionary waves they correct. Grand Super Cycle wave II lasted only eight years, but it corrected Grand Super Cycle wave I which may have lasted at least 50 years (from the Depression of the 1870’s to the early 1920’s).
Grand Super Cycle wave III lasted 81 years, but Grand Super Cycle wave IV does not have to be as long in duration. It may be over within a few years.
The guidelines given for durations of waves in this chart are rough guidelines only. Flexibility should be applied. Not only are corrective waves quicker than the actionary waves they correct, but when actionary waves extend in price they also extend in time pushing out these expectations, or for non extended waves compressing expectations.
MONTHLY WAVE COUNT
All monthly charts are always on a semi-log scale.
A double zigzag downwards is complete within Grand Super Cycle wave IV. This would be very unlikely to be the entirety of Grand Super Cycle wave IV, because it is far too brief and shallow for a wave of this degree. It would most likely be Super Cycle wave (a).
Grand Super Cycle wave II was most likely a relatively quick zigzag lasting a Fibonacci eight years. The earliest reasonable expectation for Grand Super Cycle wave IV may be for it to total a Fibonacci thirteen years, but it may also be longer lasting, possibly a Fibonacci twenty one years.
Grand Super Cycle wave IV would most likely exhibit alternation with Grand Super Cycle wave II, so it is unlikely to be a zigzag. The first move down within it subdivides as a three (a double zigzag) very well and will not fit as a five meeting all Elliott wave rules.*
Because the first movement down is a multiple, a larger multiple corrective structure may be eliminated for Grand Super Cycle wave IV. This is because the maximum number of corrective structures within a multiple is three. To label multiples within multiples increases the maximum beyond three, violating the rule.
With the first movement down being a three wave structure, a triangle or flat correction is indicated as most likely for Grand Super Cycle wave IV. Within both of these types of structures, Super Cycle wave (b) may make a new price extreme beyond the start of Super Cycle wave (a) at 1,920.18, as in an expanded flat or running triangle.
Within a flat correction, Super Cycle wave (b) must make a minimum 0.9 correction of Super Cycle wave (a) at 1,832.79. The normal range for Super Cycle wave (b) of a flat correction would be between 1 to 1.38 the length of Super Cycle wave (a) at 1,920.18 to 2,252.27,
Within a triangle, Super Cycle wave (b) has no minimum requirement. It may make a new high above the start of Super Cycle wave (a) at 1,920.18 as in a running triangle.
Super Cycle wave (b) is likely to be very deep. The most likely structure to achieve a very deep correction is a zigzag or a zigzag multiple. An expanded flat may also achieve this.
There are more than 23 possible corrective structures that Super Cycle wave (b) may take. At this stage, it is possible to say which one is most likely, but not which one will unfold. Flexibility is essential while this structure unfolds upwards.
A support line is drawn across the lows of December 2001 to April 2003 and extended out (cyan). This trend line has offered support and resistance, so it should do so again.
*Edit: Comment added: the * in the analysis above needs explanation. I am aware that other analysts see this big wave down as a completed five wave structure. Their wave counts see an ending diagonal beginning on 10th July 2014. Such a wave count violates the rules for wave lengths of contracting diagonals, the third wave within the diagonal is too long, it is longer than the first wave. I will not rely on nor publish any wave count which violates any Elliott wave rule.
This analysis is published about 02:30 a.m. EST.
Copied over from daily for reference:
Papudi
July 9, 2016 at 9:18 am
Lara: On grand super cycle wave iv duration in the past you had estimated to be shorter than Super cycle wave III (81 years).
In the past your comment was”I have Gold in a Grand Super Cycle wave IV (lime green circle).
I have Grand Super Cycle wave III lasting 79 years. I would expect Grand Super Cycle wave IV to be more brief, so maybe a Fibonacci 55 years.”
The current updated duration for grand super cycle wave IV is few years. I am happy to see revised duration from 55 years from 2011.
Are you expecting cycle wave b to be complete soon and then cycle wave c to begin soon to cycle wave c target of 600 in few years??
It has been our experienced that completion of wave structure are after the fact.
Gold’s price between 1900 and 2200 we will be expecting cycle wave b to be complete. NOT BEFORE THAT.
PS: I am not trying to be critical but am trying to see how to manage my long term core gold investment. I am not a day trader. I like the long term perspective of gold using your excellent EW analysis ( which is the only best analysis).
Thanks.
Reply
Lara
July 9, 2016 at 4:12 pm
Thanks Papudi, I’m not taking your comment as criticism at all, it’s an entirely valid question.
Time is harder than price to estimate, and so I do tend to change my estimates and sometimes I’ll flip flop, which is horribly confusing and unhelpful I know, and so for that I apologise.
My comment about Grand Super Cycle wave IV was that it MAY be over within a few years.
Let me take a stab in the dark and try to estimate how much longer it may be.
Grand Super Cycle wave III was about 81 years, not a Fibonacci duration, too far off 89 to be considered close.
If Grand Super Cycle wave IV is an expanded flat then it would be quicker than if it is a triangle. So far Super Cycle wave (a) was 4.25 years. Super Cycle (b) may be about the same, but if it turns into a complicated time consuming B wave it could be a great deal longer. Let’s assume for simplicity that it’s about the same, so at it’s end Grand Super Cycle IV may be 8.5 years. Still requiring Super Cycle (c) to complete it.
The next Fibonacci number in the sequence is 13, so Super Cycle (c) may last about 5 years, taking Grand Super Cycle IV to a total Fibonacci 13 years.
What if it’s a triangle? Then the whole thing could move sideways in an ever decreasing range for years and years…. total a Fibonacci 21 maybe?
It is absolutely impossible to tell at this point if it will be a flat or a triangle. Both start out with a three for the A wave, and both may have the A wave as a double zigzag. Both flats and triangles are common structures.
So you see, this really is quite a stab in the dark. And the whole premise of my musing above is that Grand Super Cycle IV may exhibit a Fibonacci duration…. and if it doesn’t then my words above are useless.
Sorry for the very long comment!
Reply
Lara
July 9, 2016 at 4:19 pm
And about price:
“Gold’s price between 1900 and 2200 we will be expecting cycle wave b to be complete. NOT BEFORE THAT.”
Not necessarily.
The minimum for a flat is for Super Cycle (b) to end at 1,832.79.
There is no minimum for a triangle. I have found a common length for triangle subwaves is about 0.8 to 0.85 the prior wave, which would see Super Cycle (b) reach to 1,745.
It can move up to 1,900, it can make a new high, but it doesn’t have to.
Sorry Papudi, the biggest thing to remember here is we need flexibility. This is a corrective structure, and we can’t tell at this stage which structure it will be.
Right now, we’re in a B wave within a correction. The worst most horrible difficult to analyse. Over 23 possibilities. And we have no idea which one it is yet.
Reply
Papudi
July 9, 2016 at 8:11 pm
Excellent Thank you this gives me some perspective to work with.
I appreciate.
Thought this chart was interesting….
It is indeed. I have that line in red on my weekly charts. You’ll now see it coming up on the daily chart… I think that’s the next line of resistance.
Your comments were held in moderation Norman because they were your first. Now you’ve had comments approved you won’t need to wait next time 🙂
Awesome. Thanks for the update. When we get closer to the cyan trend line, it would be great if you could replicate it on the weekly and ultimately the daily charts. Thanks again!
Your weekly charts with notations is helpful. May I request you to post here for future reference.
Lara: ” The earliest reasonable expectation for Grand Super Cycle wave IV may be for it to total a Fibonacci thirteen years, but it may also be longer lasting, possibly a Fibonacci twenty one years.”
As of today it is 5 years. Atleast 8 more to go.
I will not see the gold bug super cycle wave V!!!!
Thanks Lara.
Exactly my thoughts too. Oh well, the truth is the truth. Lara’s wave count is logical and makes sense so we will see what happens. I suppose silver will follow or lead gold up to the 2011 highs in wave (b) also, and I would guess at that point it would be time to dump my 90% silver coins or I could leave them for my kids who would hopefully live to see Grand Super Cycle V unfold.
Thanks for this analysis Lara. Your historical wave counts are most interesting.
Why will you not see supercycle V ? Only GOD knows when you might leave this life for a better one. I myself expect to live to 125 years old in this lifetime (my 11th one on Earth.) After that I will re-exist for a 12th , and last time. Stephen of New London CT. Remember,” We are all Angels with one wing, but we can fly ,embracing one another.” Titus Lucretius Carus, Roman poet and philosopher circa 65 B.C.
🙂 I’m planning on living to about 120 and surfing until I’m as close to 100 as I can.
If I could live forever I think I’d like that, always more waves to surf and life is so beautiful