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.

TraderJoe

Thank you for the Gold analysis Joe. Could there be an expanded FLAT possibility with X=A and Y=B?

ReplyDeleteWelcome. An expanded flat of what?

DeleteOf a 2nd wave.

Delete'Possible' but only remotely so, because in an expanded flat, the C wave often greatly exceeds the end of the A wave, and that would represent a loss of momentum, and a loss of channel. Also, second waves tend to be sharp zigzags rather than flats - just lower probability is all. Then, the whole cycle of looking for 'five waves up' would have to begin again. Right now there are three-waves up.

DeleteStill, I'll keep an open mind on it.

Thank you Joe.

DeleteThanks for your work. Are there any indications that the 3 4 could turn into (i) (ii)? Is this where the count would go if 2347 is broken?

ReplyDeleteIt could, but I'd want to examine the internals at the time if that should happen. Right now there are quite a few gaps, aren't there? And they are not 'above' price. They are below it.

DeleteRegarding oil chart on video on the new year day. You have drawn the parallel channel on linear scale though the time period is large. How do you decide the parallel channel is linear or log scale?

ReplyDeleteIn log scale we are close to resistance.

DeleteThat's a very good point. Thank you for bringing it up. Elliott said to keep both, and use whichever is appropriate. Log scale is certainly applicable to weekly work. So, I checked a log plot weekly, and your observation is confirmed. So, we have to monitor for both.

Delete