Downwards movement was not expected. I had expected upwards movement to show an increase in momentum.
I have an increased confidence in the main Elliott wave count today with a breach of the orange channel on the hourly chart.
Last main hourly Elliott wave count expected a continuation of sideways movement as a fourth wave correction unfolds; this sideways movement was expected to continue for one or two days. The alternate hourly wave count was invalidated.
Summary: Sideways movement may end within a few hours, then the upwards trend should resume. The target for this upwards wave to end remains at 1,346. I will be able to add to the target calculation at a second degree tomorrow, so tomorrow it may widen to a small zone or it may change.
Click on charts to enlarge.
Primary wave 4 is an incomplete regular contracting triangle. Primary wave 2 was a deep 68% running flat correction. Primary wave 4 is showing alternation in depth and some alternation in structure.
Within the triangle of primary wave 4 intermediate wave (E) is unfolding as a zigzag: minor wave A is a five wave impulse and minor wave B downwards is a zigzag. I have drawn a corrective channel about minor wave B downwards. This channel is now breached by a full candlestick above the channel and not touching it, confirming minor wave B is over and minor wave C upwards has begun.
Because there is a clear triangle within this downwards wave of minor wave B, this movement cannot be a new impulse to the downside because a triangle may not be the sole corrective structure in a second wave position. The position of this triangle indicates strongly that intermediate wave (E) is incomplete.
At 1,346 minor wave C would move slightly above the end of minor wave A at 1,345.22 and avoid a truncation. At 1,346 minor wave C would reach 0.618 the length of minor wave A. At 1,346 intermediate wave (E) would fall short of the (A)-(C) trend line.
Within minor wave C no second wave correction may move beyond its start below 1,280.35.
Intermediate wave (E) may not move beyond the end of intermediate wave (C) above 1,392.30.
Sideways movement is a continuation of minute wave iv. A new low very slightly below 1,305.59 invalidated the alternate which saw this fourth wave correction complete, but clearly it is not over yet.
There are still a few possible structures that minute wave iv may be taking. I have labeled it as a regular contracting triangle, but it may also be a combination or double zigzag. A triangle or combination are the most likely, and a double zigzag is technically possible but at this stage the least likely structure.
Triangles and combinations have the same purpose: to take up time and move price sideways. Whichever structure this fourth wave completes as I would expect only sideways movement, and I would expect price to find support if it gets to reach the lower edge of the pink channel.
Minute wave ii was a deep 87% double zigzag. If minute wave iv is either a triangle or double combination it will show structural alternation with minute wave ii, and will most likely end about the 0.382 Fibonacci ratio of minute wave iii at 1,307.30.
Minute wave ii lasted 49 hours. So far minute wave iv has lasted 39 hours. If it ends within the next 24 hours they will be reasonably in proportion, enough for the wave count to have the right look. At this stage I expect minute wave iv to end within the next few hours.
Draw a channel about minor wave C using Elliott’s first technique: draw the first trend line from the ends of minute waves i to iii, then place a parallel copy on the end of minute wave ii.
Minute wave iv may not move into minute wave i price territory below 1,297.32.
When I know where minute wave iv has ended then I can use the ratio between minute waves i, iii and v to add to the target calculation for minor wave C to end. I cannot do this yet and may be able to do it for you tomorrow. The target at 1,346 may widen to a small zone or it may change tomorrow.
At this stage I would expect minute wave v to most likely be about even in length with minute wave iii at $40.28.
If minute wave iv ends in a few hours and minute wave v lasts about three days, then the target at 1,346 may be met within three or four days time.
This analysis is published about 05:04 p.m. EST.
Sideways movement has not clarified the situation. The Elliott wave counts remain the same.
Price did not move quite as high as expected at the start of Monday’s session. This changes the wave count.
Downwards movement was expected.
The main wave count expected upwards movement which is what we have seen.
The wave count remains the same.
Summary: I expect that we have seen a trend change back to the upside. Movement above 1.353.07 would confirm this. The mid term target is at 1,390 for upwards movement to end.
This analysis is published about 04:15 p.m. EST. Click on charts to enlarge.
Main Wave Count.
Gold is still within a large fourth wave correction at primary wave degree which is incomplete.
Primary wave 2 was a rare running flat. Primary wave 4 is unlikely to be a flat correction because it is likely to show structural alternation with primary wave 2.
The first upwards wave within primary wave 4 labeled intermediate wave (W) subdivides as a three wave zigzag. Primary wave 4 cannot be an unfolding zigzag because the first wave within a zigzag, wave A, must subdivide as a five.
Primary wave 4 is unlikely to be completing as a double zigzag because intermediate wave (X) is a deep 99% correction of intermediate wave (W). Double zigzags commonly have shallow X waves because their purpose it to deepen a correction when the first zigzag does not move price deep enough.
Primary wave 4 is most likely to be completing as a double combination: zigzag – X – second structure. The second structure labeled intermediate wave (Y) may be either a flat or a triangle. For both these structures minor wave A must be a three.
Minor wave A is an incomplete double zigzag. The second zigzag in the double is incomplete. At this stage there is a morning doji star candlestick pattern forming at the bottom of minuette wave (b) within minute wave y. If this pattern holds while the current daily candlestick closes we shall have more confirmation of a trend change at 1,328.18. A morning star pattern is one of the more reliable candlestick patterns.
Primary wave 4 may not move into primary wave 1 price territory. This wave count is invalidated with movement above 1,532.90.
Minuette wave (b) subdivides as a complete double combination: zigzag – X – regular flat.
Movement above 1,353.07 would confirm this trend change. While price remains below this point the alternate wave count will remain valid.
Within the new upwards trend micro waves 1 and 2 are complete. At 1,364 micro wave 3 would reach 1.618 the length of micro wave 1. This short term target may be met within the next 24 hours.
At 1,390 minuette wave (c) would reach 1.618 the length of minuette wave (a). This is the ratio I am using to calculate the target because minuette wave (a) was very short, and it would see the ratios of A and C waves within the two zigzags of the double show alternation. This target may be met in about one to two weeks.
Within micro wave 3 no second wave correction may move beyond its start. Micro wave 3 is invalidated with movement below 1,337.78.
If price moves below 1,337.78 it may be that micro wave 2 is continuing further sideways. Micro wave 2 may not move beyond the start of micro wave 1. This wave count is fully invalidated with movement below 1,328.18.
Alternate Wave Count.
If minor wave A is complete then minor wave B has begun. This wave count now diverges with the expectation for Silver significantly enough to reduce its probability, while the main wave count is in line with my expectations for Silver.
This wave count requires a clear breach of the pink channel about minor wave A for confirmation.
This wave count sees minuette wave (iii) over at 1,343.35 and minor wave A may be complete.
Within minor wave B the first 5-3-5 downwards is incomplete. At 1,316 minuette wave (iii) would reach 1.618 the length of minuette wave (i).
This wave count requires confirmation below 1,328.18. At that point the main wave count would be fully invalidated.
Subminuette wave ii may not move beyond the start of subminuette wave i. This wave count is invalidated with movement above 1,353.07.
Alternate Daily Wave Count – Triangle.
It is also possible that primary wave 4 may continue as a regular contracting (or barrier) triangle.
This wave count has a good probability. It does not diverge from the main wave count and it will not diverge for several weeks yet.
Triangles take up time and move price sideways. If primary wave 4 unfolds as a triangle then I would expect it to last months rather than weeks.
Again upwards movement was not expected, although it was allowed for and has not invalidated the wave count.