Gold

This is a weekly chart, I am thinking it is in a wave 4 (possibly a flat 3,3,5), but
not sure about the C wave, can the 4th wave retrace into the 1st wave?
I know that in an impulse this would ruled out except in a diagonal, but if this
is a corrective wave 4, can this be allowed, and if so could Gold be headed to the 1590 area?

dl.dropbox.com/u/43650856/Gold%20-%20Wee...sible%20wave%204.htm

Broad-rock,
I normally refrain from debating EWT but its a very interesting chart so couldn't resist!
Here is how I see it & its all IMHO.

On a Weekly chart it looks like a possible Corrective Wave in a 3rd or 5th wave Extension

Instead of a flat 3-3-5 it looks like a 3-3-3-3-3 Horizontal Descending Corrective Triangle with a Top declining and a Flat bottom in a Bull Market


Weekly Chart


Looking at the Daily chart you will see its a Combination Corrective Elliot Wave made up of a 5-3-5 Zigzag(W), any three(X) and a 5-3-5 Zigzag(Y) again (rare)!

Now take a close look at Y on daily chart (Zoomed in view)..you will see 5 waves are already completed confirmed by a bullish divergence on rsi between subwaves 3 and 5


Bottom of 5 on Y was at 1625 (long wicked candle)

How to trade this??
On a Daily Chart we can label 1625 as 1, the swing high after that at 1697 as 2 and the recent swing low at 1652 as 3...we get a potential 123 low forming (its made a HL but its still not made a HH which will only happen if we see a 123 low breakout (close above 1697)

For a better R:R ratio if you look at 4H chart its making another 123 low with 1 at 1657, 2 at 1682 and 3 as 1665. So a SL below 1665 for a long position and a close above 1682 will indicate a move towards 1697, 1796 and 1921(all time high) giving a R:R ratio of more than 1

A close below 1625 will indicate a move towards 1522 which is the flat bottom of the triangle

PS - as far as I am aware wave 4 and 1 overlap can be seen in Diagonal Triangles in a motive wave(ending or leading) as well as in corrective waves

Oops didn't post the Daily Zoomed out view with WXY in the previous post

Thank you redchilly for your detailed answer, and if this is anything like your usual
analysis it will be spot on.
I agree that 1682 is significant for now and I think a break above 1700 area would be bullish.
But I have a couple of doubts that are stopping me buying.

On the divergence, I would expect some within the wave 3 (like between sub-wave 3-5)
and then 2 more divergences, 1 within the wave 5 and the other between wave 3 & 5.

Also why would the e of triangle be so high compared with a & c?

Broad-rock
You are right if its a flat bottom triangle e should be in line with a and c around the 1522 area.
Reason why I have labelled it higher is because thats where 5 wave down move was completed....taking it any further down would mess up the combination elliott wave structure and would be an alarming sign that trend may be reversing and we could be heading down to break 1522! We will have to wait and see what happens?

I have opened a Long Position on Gold today at 1670. My SL is below 1650

I'm long now on this at the uptrend support @ 1643. Stops should be below 1625 really but mine's a bit tighter than that as I'm not convinced about this one:



dl.dropbox.com/u/20815047/Golddaily12_02_13.gif