GOLD Elliott Wave Technical Analysis

By: Lara Iriarte | Tue, Aug 5, 2014
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This analysis is published about 05:41 p.m. EST.

Upwards movement was expected for Gold but has not happened. The correction continued lower, and sideways movement completed a small green doji. The main and alternate Elliott wave counts remain mostly the same.

Summary: I expect overall upwards movement here for a minor degree wave to just above 1,345.22, to last about 17 days in total. So far it has lated three days. In the short term I still expect that a third wave up is beginning. The target is at 1,310. I will have full confidence in the main wave count above 1,304.88.

Main Wave Count.

Gold Daily Chart
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The main wave count sees primary wave 4 as 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 now a complete zigzag. I have drawn a corrective channel about minor wave B downwards. Apart from a small overshoot within the triangle of minute wave b this channel shows perfectly where price is finding resistance currently. This channel is further support of this wave count.

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.

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.

I can see another alternate possibility today. If primary wave 4 is over at the high labeled minor wave A within intermediate wave (E) then it is possible that primary wave 5 is beginning with a leading diagonal in a first wave position. However, leading diagonals in first wave positions are not very common. This alternate idea is possible, but I judge it to have a very low probability, maybe as low as 5%. I will only publish this idea if the black (B)-(D) trend line is clearly breached.

Gold Hourly Chart
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Minuette wave (ii) continued further as a double zigzag. The second zigzag in the double deepened the correction.

At 1,310 minuette wave (iii) would reach 1.618 the length of minuette wave (i).

Once upwards movement manages to break through the upper edge of the pink channel which contains minor wave B downwards then I would expect to see an increase in upwards momentum. If this wave count is correct then this should happen within the next 24 hours. If it does not then this wave count will significantly reduce in probability.

If subminuette wave ii continues further (and it most certainly could because it is not yet a very clear "three") then it may not move beyond the start of subminuette wave i below 1,282.55.

This main wave count expects to see a strong increase in upwards momentum in the next 24 hours, before next analysis is due.

I will have full confidence in this main wave count with price movement above 1,304.88.

Alternate Wave Count.

Gold Daily Alternate Wave Count Chart
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If minute wave b was not a triangle but a sharp zigzag ending higher up then minute wave c may be unfolding as an ending contracting diagonal.

Within the diagonal minuette wave (iii) is shorter than minuette wave (i). This means that minuette wave (iv) must be shorter than minuette wave (ii). The diagonal trend lines should converge. Only the final fourth and fifth wave zigzags need to complete this structure. At 1,273.50 minute wave c would reach equality in length with minute wave a.

When minute wave b ends at the point labeled and a trend channel is drawn about this downwards zigzag then minuette wave c does not remain contained within the channel. Normally Gold has structures which look fairly typical and are nicely contained within normally drawn channels. This wave count does not have a typical look for Gold. I would judge this problem to reduce the probability of this alternate to below 20%.

Minuette wave (v) should end at the lower (i)-(iii) trend line of the diagonal.

Gold Hourly Alternate Wave Count Chart
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The pink trend line sloping downwards on this chart is the upper edge of the corrective channel about minor wave B copied over from the daily chart. Here on the hourly chart it is clear how much of minute wave c does not fit into this channel. This looks very atypical for Gold.

At 1,304.88 minuette wave (iv) would reach equality in length with minuette wave (ii). Because the diagonal is contracting this fourth wave zigzag should not be longer than equality with the second wave. Movement above 1,304.88 would see this wave count discarded as at that stage the diagonal would be too atypical.

At 1,300 subminuette wave c would reach equality in length with subminuette wave a. This would complete minuette wave (iv) zigzag.

Minuette wave (iv) may not move beyond the end of minuette wave (ii) above 1,312.28. However, this wave count would be discarded well before the invalidation point is passed.

The final fifth wave downwards would most likely end when price comes to touch the lower (i)-(iii) trend line of the diagonal. It would likely move at least slightly below the end of minuette wave (iii) at 1,280.25 to avoid a truncation. The target is where minute waves a and c would reach equality in length at 1,273.50.

 


 

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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