Upwards movement continues as expected. I have a new alternate Elliott wave count for you to consider today.
Upwards movement was expected for all three hourly Elliott wave counts.
Sideways movement has slightly breached the invalidation point on the hourly chart. The Elliott wave count at the hourly chart level is adjusted, but the target remains mostly the same.
Yesterday’s analysis expected more downwards movement to complete a correction, and I had expected it to end within 24 hours. This is not what happened. The correction is continuing and is longer in duration than expected.
Sideways movement and a small green candlestick for Tuesday’s session fits yesterday’s alternate wave count nicely. This will now be my only wave count and I can calculate a target for you.
The mid and long term pictures remain exactly the same.
Yesterday’s analysis expected to see sideways movement for the short term, to last up to one day. This is exactly what has happened over the last 24 hours.
Today’s analysis focusses on whether or not the sideways movement is over.
The channel on the hourly chart was not clearly breached, and a new low below 1,277.47 has invalidated the main hourly wave count and confirmed the second alternate. Now we have some clarity I have just the one hourly wave count for you today.
Upwards movement was expected. I still have two hourly wave counts for you. They both expect that this trend is incomplete.
Price has moved a little lower. Thereafter, it has turned up a little remaining well below the invalidation point. The green candlestick on the daily chart for Thursday’s session does not alter the wave count at all. It remains the same.
Yesterday’s analysis expected downwards movement to a minimum of 1,308 before upwards movement. Price moved lower as expected, reaching down to 1,305.97.
The corrective structure of minute wave b is still incomplete.
Click on the charts below to enlarge.
The structure for primary wave 4 cannot be a flat correction, because what would be the B wave is well less than 90% of what would be the A wave. That is why I have labeled it as a double.
Because intermediate wave (X) is quite shallow I would expect primary wave 4 is most likely a double zigzag rather than a double combination. Double combinations move price sideways and their X waves are usually deeper than this one is. Double zigzags trend against the main direction, and their purpose is to deepen a correction when the first zigzag did not take price deep enough. So I will be expecting intermediate wave (Y) to subdivide as a zigzag and to take price comfortably above 1,433.83. It should last about 35 to 45 days or sessions in total.
Within the zigzag of intermediate wave (Y) minor wave B may not move beyond the start of minor wave A. This wave count is invalidated with movement below 1,251.76.
The structure of minuette wave b is closer to completion, but it is still incomplete.
Minuette wave (b) is a 101% correction of minuette wave (a) which indicates a regular flat is unfolding for minute wave b. Regular flats most commonly have C waves which are close to equality with A waves. I would expect minuette wave (c) to overshoot the parallel channel slightly.
Minuette wave (b) is now a complete zigzag. Within it subminuette wave c is 0.71 short of 1.618 the length of subminuette wave a.
The final wave upward of minuette wave (c) needs to unfold as a five wave structure. Minuette wave (c) is highly likely to make a new high above the end of minuette wave (a) at 1,322.68 to avoid a truncation and a very rare running flat. At 1,323 minuette wave (c) would reach just over equality with minuette wave (a).
Alternate Daily Wave Count.
It is possible that a large contracting triangle is unfolding for primary wave 4, but it has a lower probability than the main wave count. Double zigzags and combinations are in my experience more common structures than triangles. However, triangles are not rare, they are just less common.
Triangles are very tricky structures to analyse. I normally only consider them when they show themselves clearly, which is close to the end of the structure.
At this stage within a possible triangle only waves A and B would be complete. One of the five subwaves should subdivide into a double zigzag, be more time consuming, and have deeper corrections than the other subwaves.
Within a contracting triangle intermediate wave (C) may not move beyond the end of intermediate wave (A), and intermediate wave (D) may not move beyond the end of intermediate wave (B).
Within a barrier triangle intermediate wave (D) should end about the same level as intermediate wave (B), which in practicality means it may move slightly lower than 1,251.76. As long as the B-D trend line remains flat.
The triangle is invalidated with any movement above 1,438.83, or with much movement below 1,251.76.
Last analysis expected more upwards movement for gold, which is what happened. However, price did not complete the triangle and move up to the target as expected.
I will present all the alternate wave counts that I can see today, and keep publishing them until one by one they are invalidated.
There are 13 possible corrective structures that could be completing for this fourth wave (more if we include each type of combination as a different corrective structure). At this stage I can narrow down the possibilities, but it is impossible to say with certainty which structure will be the one which completes. The best I can do is present all possibilities. I will present them in order of probability.
Yesterday’s analysis expected some downwards movement, but not as much as we got. The target was 1,394, but price fell through this and invalidated the hourly wave count. Price remains above the invalidation point on both daily wave counts.
The wave count remains the same.
Click on the charts below to enlarge.
Main Wave Count.
This wave count agrees with MACD. If upwards movement is within a third wave, then it should show an increase in upwards momentum beyond the end of minor wave 1. Because we have not seen that increase in upwards momentum yet (on the one to six hourly time frames) we may not have seen the middle of the third wave.
At 1,545 minor wave 3 would reach 1.618 the length of minor wave 1.
Within minor wave 3 subminuette wave ii may not move beyond the start of subminuette wave i. This wave count is invalidated at minute wave degree with movement below 1,352.45.
Movement slightly below 1,359.25 has changed the structure of subminuette wave ii, which remains viable. Downwards movement for Tuesday must be a continuation of subminuette wave ii as a double zigzag.
Within the second zigzag labeled microwave Y submicro wave (B) is just 0.08 short of 2.618 the length of submicro wave (A).
We need to see price move above 1,382.18 to have confidence that subminuette wave ii is over and a third wave is underway. At that stage upwards movement could not be just a fourth wave correction within a new downwards impulse, and so the downwards wave labeled micro wave Y would have to be a completed three wave structure.
Further movement above the parallel channel containing this downwards correction would provide trend channel confirmation of a trend change.
If subminuette wave ii moves lower it may not move beyond the start of subminuette wave i. This wave count is invalidated with movement below 1,352.45.
If this wave count is invalidated with downwards movement then we should use the second daily possibility below.
It is possible that this downwards movement is a fourth wave correction for minute wave iv, and that minute wave iii is complete.
Minute wave iii is just 2.51 longer than 1.618 the length of minute wave i.
This wave count also expects more upwards movement from gold, but for a fifth wave not the middle of a third. The difference is in expected momentum; the first daily chart expects a strong increase in momentum.
Minute wave iv may not move into minute wave i price territory. This wave count is invalidated with movement below 1,344.26.
Alternate Wave Count.
If cycle wave a is unfolding as an impulse then recent upwards movement is primary wave 4 within the impulse. Primary wave 4 may not move into primary wave 1 price territory. This wave count is invalidated with movement above 1,532.90.
Primary wave 4 is incomplete.
This wave count is an alternate because there are no Fibonacci ratios at intermediate degree within primary wave 3 of cycle wave III. I have spent much time trying to see a better fit in terms of ratios which meets all EW rules for this wave count, but so far I cannot. This does not mean it does not exist!
For this alternate wave count we need to see minor wave 3 within intermediate wave (C) as completed; there is not enough room for upwards movement if the third wave is extending.
At 1,440 intermediate wave (C) would reach intermediate wave (A). At 1,431 minor wave 5 would reach 0.618 the length of minor wave 3. This gives us a $9 target zone for one final upwards wave. Thereafter, the downwards trend should resume.
There is no downwards invalidation point (beyond the short term) for this alternate.