|SP500 4-hr Chart : Minute ((iii)) Continues|
As a special favor to all those interested in the GOLD market : from the year-end YouTube video, I said that for me to count GOLD in a more bullish posture, it would have to make a clean five-waves up. I have been commenting regularly on this in the live chat room, but due to overlaps at the onset of the yellow metals' recent advance, it is not yet possible to count five waves up, using The Eight Fold Path Methodology. Here is the four-hourly chart.
|GOLD (GC J17) Not Yet Five Waves Up|
Due to those overlaps, I can only count W-X-Y, and I provided a warning last week of more potential downward overlaps that did, in fact, later occur (right-hand-side of chart). The initial overlaps appeared to be a part of an expanding leading diagonal which does count correctly for wave (i), on the left-hand-side of the chart. (Yes, a lot of overlaps to deal with!)
You can now see that W has been overlapped downward, as has the 'a' wave of Y. The problem from the perspective of The Eight-Fold Path Method is that the Elliott Wave Oscillator on X is way too deep to be a fourth wave. It is more than -40% of the highest value. In fact, it's more than -100% of the highest value!
Because Y is shorter than W, there is only one way I can see for the market to rescue a bullish count. Since W is a zigzag, X is a zigzag, and Y is a zigzag, then it would be necessary to form a leading contracting diagonal upward, and this downward wave would have to be both be shorter than X, and remain above the end of X. Then, another upward zigzag could form as a Z wave, or wave (v) in a contracting leading diagonal where W = (i), X = (ii), Y = (iii), X2 = (iv), and Z = (v). Then, such a Z wave or wave (v) would need to remain shorter than the Y wave or wave (iii).
Diagonals are sometimes rare birds, and there is no evidence for the upward wave Z, as of yet. So, until I clearly see "five waves up", it is possible to revisit the lows to finish the downward count. But, I will definitely keep my mind and my eyes open.
Until then, Cheers! And have a nice night.