GOLD Elliott Wave Technical Analysis

By: Lara Iriarte | Sun, Sep 22, 2013
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Originally published 20th September, 2013

Last analysis had two hourly wave counts. The alternate was confirmed quickly with movement below 1,359.20. The alternate hourly wave count expected more downwards movement to the most likely target at 1,323.12. Friday's session reached down to 1,324.94. A breach of the small channel on the hourly chart would indicate downwards movement is over. The next wave up should see an increase in momentum.

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.

XAU/USD Hourly Chart
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So far there may be a five wave impulse upwards for a first wave, followed by a typically deep second wave.

Ratios within minute wave i are: minuette waves (iii) and (i) have no Fibonacci ratio to each other, and minuette wave (v) is just 0.03 longer than equality with minuette wave (i).

So far within minute wave ii the structure has a corrective wave count and subdivides into a three wave zigzag. Minuette wave (c) so far is 0.21 short of 0.236 the length of minuette wave i. However, there is not enough movement up at the end of Friday's session to confirm that minute wave ii is over.

The parallel channel drawn about minute wave ii is a best fit. When this channel is clearly breached by upwards movement then I will have some confidence that minute wave ii is most likely over and minute wave iii is underway.

At 1,459 minute wave iii would reach 1.618 the length of minute wave i. If minute wave ii moves lower this target must move correspondingly lower also.

It is very likely minute wave ii is over here because minute wave ii may be a completed corrective structure, is in proportion to minute wave i, and has ended at the 0.618 Fibonacci ratio of minute wave i.

The next upwards movement should see some increase in momentum.

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

Daily Alternate Wave Count.

XAU/USD Daily Alternate Wave Count Chart
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I have tried to see as many alternates as I can. This wave count is possible but it has problems of proportion which make it look odd. I will publish it as a slim outlying possibility. I would only use it if it is confirmed with movement below 1,291.95.

If primary wave 4 is over then it lasted only 9 weeks, compared to primary wave 2 which lasted 53 weeks. This gives the monthly chart the wrong look.

Within recent downwards movement minute wave ii may not move beyond the start of minute wave i. This wave count is invalidated with movement above 1,416.45. If price moves above this point next week I would have more confidence in the main 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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