11 a.m. New York time

What’s happening now. The Gold Futures peaked overnight at 11:15 p.m. New York time and then began to fall. The GLD exchange-traded fund also fell at the opening bell and continued to decline as the session continued. So far the price has reached below 316.

What does it mean? The discussion below uses the labeling system seen on the chart. See the section below titled “Elliiott Wave Theory wave labels”.

The end of the 5th wave that began on April 17, wave 5{-5} triggers a series wave endings all the way up to wave 3{0}, which began on November 3, 2022 from 150.57.

Wave 3{0} has now begun wave 4{0}, a downward correction, which is now in its first subwave, wave A{-1}. All the waves smaller that wave. And at this point, every former 5th wave from wave 5{-1} to wave 5{-6} is now an A wave with the same degree.

I’ve seen cascades happen before when applying Elliott Wave Theory. This one stands among the larger.

My initial reaction was a heartfelt “No way!” The political and economic forces that coincided with GLD’s race to the top are still with us: Ever-changing tariff policies that are likely to raise prices and make shipping less certain, along with President Trump’s expressed wishes that the Federal Reserve Chair Jerome Powell eave the Fed before his term expires next year.

I then stepped back and recalled a key tennant of Elliott Wave Theory: Events don’t steer markets. Neither does policy. Markets are steered by the mass psychology of crowds. And sometimes the crowds do what’s expected, and sometimes their combined judgment takes another past.

Where we stand. If the crowd wills it, a months long downward correction phase will ensue, as each degree works through its corrective waves. And for traders, there will be ups and downs, providing opportunity. Each correction usually has three subwaves (some have more). My personal favorite waves to trade are waves 3, 5, and C.

The waves in the vast fractal field will have plenty of each.

Aternative. Or, the price might turn around and move higher, erasing all of the above. All will return to wave 3{0} encompassing a series of 5th waves. Could happen. Elliott Wave Theory doesn’t read the future, only the possibilities.

[Gold futures, 12:10 p.m., 10-minute bars, with volume]

Elliott Wave Theory wave labels. Each wave listed on the charts has two components: A wave number, and a subscript in curly brackets that place the wave’s position in the fractal strucutre in relationship to Intermediate degree. The present Intermediate degree, GLD wave 3{0}, began its rise on November 3, 2022 from 150.57 and is still underway.

Reading the chart. Price movements — waves – – in Elliott Wave Theory analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott Wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

Learning and other resources. Elliott Wave analysis provides context, not prophecy. As the 20th century semanticist Alfred Korzybski put it in his book Science and Sanity (1933), “The map is not the territory … The only usefulness of a map depends on similarity of structure between the empirical world and the map.” And I would add, in the ever-changing markets, we can judge that similarity of structure only after the fact.

See the menu page Analytical Methods for a rundown on where to go for information on Elliott Wave analysis.

By Tim Bovee, Portland, Oregon, April 22, 2025

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com