GOLD Elliott Wave Technical Analysis

By: Lara Iriarte | Mon, Aug 11, 2014
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Last main hourly Elliott wave count expected a continuation of sideways movement as a fourth wave correction unfolds; this sideways movement was expected to continue for one or two days. The alternate hourly wave count was invalidated.

Summary: Sideways movement may end within a few hours, then the upwards trend should resume. The target for this upwards wave to end remains at 1,346. I will be able to add to the target calculation at a second degree tomorrow, so tomorrow it may widen to a small zone or it may change.

XAU/USD Daily Chart
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Primary wave 4 is 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 a zigzag. I have drawn a corrective channel about minor wave B downwards. This channel is now breached by a full candlestick above the channel and not touching it, confirming minor wave B is over and minor wave C upwards has begun.

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.

At 1,346 minor wave C would move slightly above the end of minor wave A at 1,345.22 and avoid a truncation. At 1,346 minor wave C would reach 0.618 the length of minor wave A. At 1,346 intermediate wave (E) would fall short of the (A)-(C) trend line.

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.

XAU/USD Hourly Chart
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Sideways movement is a continuation of minute wave iv. A new low very slightly below 1,305.59 invalidated the alternate which saw this fourth wave correction complete, but clearly it is not over yet.

There are still a few possible structures that minute wave iv may be taking. I have labeled it as a regular contracting triangle, but it may also be a combination or double zigzag. A triangle or combination are the most likely, and a double zigzag is technically possible but at this stage the least likely structure.

Triangles and combinations have the same purpose: to take up time and move price sideways. Whichever structure this fourth wave completes as I would expect only sideways movement, and I would expect price to find support if it gets to reach the lower edge of the pink channel.

Minute wave ii was a deep 87% double zigzag. If minute wave iv is either a triangle or double combination it will show structural alternation with minute wave ii, and will most likely end about the 0.382 Fibonacci ratio of minute wave iii at 1,307.30.

Minute wave ii lasted 49 hours. So far minute wave iv has lasted 39 hours. If it ends within the next 24 hours they will be reasonably in proportion, enough for the wave count to have the right look. At this stage I expect minute wave iv to end within the next few hours.

Draw a channel about minor wave C using Elliott's first technique: draw the first trend line from the ends of minute waves i to iii, then place a parallel copy on the end of minute wave ii.

Minute wave iv may not move into minute wave i price territory below 1,297.32.

When I know where minute wave iv has ended then I can use the ratio between minute waves i, iii and v to add to the target calculation for minor wave C to end. I cannot do this yet and may be able to do it for you tomorrow. The target at 1,346 may widen to a small zone or it may change tomorrow.

At this stage I would expect minute wave v to most likely be about even in length with minute wave iii at $40.28.

If minute wave iv ends in a few hours and minute wave v lasts about three days, then the target at 1,346 may be met within three or four days time.


This analysis is published about 05:04 p.m. EST.



Lara Iriarte

Author: Lara Iriarte

Lara Iriarte

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 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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