GOLD Elliott Wave Technical Analysis

By: Lara Iriarte | Thu, Sep 19, 2013
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Movement above 1,374.17 invalidated the main wave count and confirmed the alternate. Yesterday I judged the two wave counts to have a close to even probability.

It is time to review the bigger picture. I will review my main and alternate historic wave counts today.

Main Wave Count.

XAU/USD Weekly Chart
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This is now my main historic wave count, previously it was an alternate. It looks most likely that downwards movement is unfolding as a five wave impulse from the all time high at 1,921.15. So far we have primary waves 1, 2 and 3 complete. Primary wave 4 is and incomplete double zigzag or double combination.

Primary wave 3 is 12.54 short of 1.618 the length of primary wave 1.

Primary wave 2 was deep 68% correction as a running flat. I will expect alternation between primary waves 2 and 4.

Primary wave 4 may not move into primary wave 1 price territory. This wave count is invalidated with movement above 1,532.90.

XAU/USD Daily Chart
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There are still several possible structures for primary wave 4. So far we have a three down from the high at 1,433.83. This three down is less than 90% the length of intermediate wave (W) so it cannot be a B wave within a flat over there. This structure may be a double zigzag or double combination. In a double combination the second structure labeled intermediate wave (Y) may be either a flat or triangle.

It is most likely at this stage that primary wave 4 is continuing as a double zigzag. Intermediate wave (Y) is most likely to be a zigzag.

Primary wave 2 was a deep 68% regular flat correction lasting 54 weeks. Given the guideline of alternation we may expect primary wave 4 to continue for longer than it has so far, possibly for another 10 weeks to last a Fibonacci 21 (give or take one week either side of this). If it completed as a double zigzag there would be nice alternation in structure with primary wave 2.

Primary wave 4 has already passed the 0.382 Fibonacci ratio, so it may end about the 0.618 Fibonacci ratio of primary wave 3 at 1,529.97. It should find resistance at the upper edge of the parallel channel drawn here using Elliott's first technique.

Primary wave 4 may not move into primary wave 1 price territory. This wave count is invalidated with movement above 1,532.90.

Main Hourly Wave Count.

XAU/USD Hourly Chart
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This main hourly wave count expects minute wave i is incomplete. At 1,408 minuette wave (v) would reach 0.618 the length of minuette wave (i).

Within minute wave i there is no Fibonacci ratio between minuette waves (iii) and (i). This makes it more likely we shall see a Fiboancci ratio between minuette wave (v) and either of (i) or (iii).

Within minuette wave (v) subminuette wave ii may not move beyond the start of subminuette wave i. This main wave count is invalidated with movement below 1,359.20.

Alternate Hourly Wave Count.

XAU/USD Alternate Hourly Chart
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It is possible that minute wave i is over and a second wave has just begun.

Within minute wave i there is no Fibonacci ratio between minuette waves (i) and (iii), but minuette wave (v) is just 0.03 longer than equality with minuette wave (i).

The only reason why this is an alternate is because there is a very slight truncation at the end of minute wave i. Otherwise this wave count would have a better fit. It has a very good probability despite the truncation.

Movement below 1,359.20 would invalidate the main wave count and confirm this alternate. At that stage I would have confidence gold is in a second wave correction which could last one to a few days. The most likely structure for minute wave ii is a zigzag, and the most likely price point for it to end is at the 0.618 Fibonacci ratio of minute wave i at 1,323.12.

Minute wave ii may not move beyond the start of minute wave i. This wave count is invalidated with movement below 1,291.95.

Historic Alternate Wave Count.

XAU/USD Alternate Weekly Chart
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This wave count was my prior main historic wave count. It is now an alternate.

This wave count sees the correction for cycle wave IV as a completed zigzag and recent upwards movement the start of a new cycle degree wave to last one to several years. At 1,961 cycle wave V would reach equality in length with cycle wave I.

Cycle wave IV may not move into cycle wave I price territory. Movement below 1,032.70 would invalidate this alternate providing further confirmation for the main historic wave count.

 


 

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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