GOLD Elliott Wave Technical Analysis

By: Lara Iriarte | Fri, May 23, 2014
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The triangle may now be complete. A break below 1,277.57 would confirm this.

Summary: Sideways movement may have just ended and price may be breaking out to the downside. Confirmation below 1,277.57 is required. The target is 1,189.

This analysis is published about 07:15 p.m. EST. May 22, 2014.

Gold Daily Chart
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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.

Primary wave 4 is most likely to be completing as a double combination: zigzag - X - second structure. The second structure labeled intermediate wave (Y) is most likely to be a flat correction. Within the flat correction minor wave B must reach a minimum 90% the length of minor wave A at 1,201.98.

If downwards movement does not reach 1,201.98 or below then intermediate wave (Y) may not be a flat correction and may be a contracting triangle. I will keep this alternate possibility in mind as this next wave down unfolds. If it looks like a triangle may be forming I will again chart that possibility for you.

Overall the structure for primary wave 4 should take up time and move price sideways, and the second structure should end about the same level as the first at 1,434. Primary wave 4 may not move into primary wave 1 price territory. This wave count is invalidated with movement above 1,532.90.

Within intermediate wave (Y) minor wave B downwards is an incomplete corrective structure, and at this stage the structure is most likely to be a single zigzag with a triangle for minute wave b which is very close to completion.

Minute wave b may not move beyond the start of minute wave a above 1,392.30.

At 1,189 minute wave c would reach equality in length with minute wave a. Minute wave a lasted 11 days and I would expect minute wave c to be of about the same duration. If it lasts 13 days it would have a Fibonacci time relationship.

Finally, today I have considered the possibility that when sideways movement is done price could break out to the upside. This is possible, but such a wave count has the wrong look and so I don't want to publish it for you. It only works if minute wave b is a combination: zigzag - X (as a triangle) - wave Y yet to complete. I will only chart this possibility for you if it shows itself to be true, but in my experience with Gold it has structures which look very typical. This idea does not look typical.

Gold Hourly Chart
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It is possible that minuette wave (e) and so the whole triangle is now finally over. However, I have a couple of concerns with this wave count.

Within the triangle minuette wave (b) subdivides only as a double zigzag and does not fit as a single zigzag. Within a triangle only one of the five subwaves may be a more complex wave, and so with minuette wave (b) a double zigzag that means minuette wave (e) must be a simple three, most likely a single zigzag. The problem is subminuette waves a and c within it do not subdivide as five wave structures.

My second concern is the movement downwards from the high labeled minuette wave (e). This is not a very strong movement, and when triangles complete the start of the next wave out of them is normally very swift and strong.

This makes me consider the possibility that the triangle is not over, or my labeling of some of the subwaves may be wrong, or it could be continuing yet further sideways as a nine wave triangle, or within the triangle a subwave may be unfolding as a triangle itself which I am struggling to see.

If minute wave b is continuing further sideways as a nine wave triangle then we would see a continuation of sideways movement for another one to three days, before the breakout to the downside occurs.

Minuette wave (e) of the triangle may not move beyond the end of minuette wave (c) above 1,315.72.

In the first instance a clear breach of the lower (b) - (d) trend line of the triangle would indicate price is breaking out to the downside.

Movement below 1,277.57 would provide final confirmation that price has broken out to the downside. At that stage downwards movement could not be a b wave within a zigzag for minuette wave (e), nor could it be a continuation of any triangle subwave of a nine wave triangle.

 


 

Lara Iriarte

Author: Lara Iriarte

Lara Iriarte
elliottwavegold.com

Lara Iriarte

Elliott wave is one of the more difficult and complicated technical analysis tools. When done right it can be uncannily accurate.

I have been using the Elliott wave principle to analyse up to five markets a day since 2008. I began Elliott Wave Forex (originally ForexInfo.us) in 2009 to provide daily analysis of EURUSD and GBPUSD, then I began Elliott Wave Stock Market in 2010. Elliott Wave Gold began in August, 2013. Currently I provide daily analysis of Gold on this site, and daily analysis of the S&P 500 on Elliott Wave Stock Market for its members.

I have a science background (BSc) which has trained me to think logically and be evidence focussed. Over the years I have seen no market movement which does not fit into the clear and restrictive rules for Elliott wave structures.

I have members who are fund managers, institutional investors and professional traders.

If you want to learn how to apply the Elliott wave principle to any market my analysis service is designed to teach you, daily, how to do this.

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