Gold Price And Other Markets Evaluation via Ewave Analysis

Gold

 

Gold rallied to 1194.80, in the overnight session, at the time that this Post was being written. As we said in yesterday's End of Day Post we now appear to have a three wave rally in place from 1181.10 to 1204.60, which suggests that gold is going to be dropping below the 1181.10 low, at least one more time.

There is an outside chance that we could have:

!i! = 1190.20;

!ii!  is still underway in a complex irregular correction. In this case we are heading to at least 1184.80 again.

All current Options remain valid at this point.

No change to our current 17 long positions, risking to 1141.50!

Crude

Crude continued higher very nicely in the overnight session reaching 61.15, at the time that this Post was being written. It sure looks now like wave ^iv^ ended at 59.34 and that we are now in wave ^v^ of *v*.

Our minimum target, for the end of wave *v* is the wave *iii* high of 62.56. As we indicated in last Weekend Post, wave ^iii^ in crude did not reach our ^iii^=1.618^i^ target of 61.28, so we cannot rule the possibly that we are still in wave ^iii^, and it that case wave ^iii^ would currently look like:

!i! = 60.69;

!ii! = 59.34;

!iii! is now.

This Option would support our idea that crude is going to rally into the 64/65 area to challenge the major down trend line that we spoke during the last Weekend Post also. We have raised our stops to 59.33.

It is still possible that wave ^iv^ become more complex.

We plan to take profits on our long positions at the end of wave *v* and go short to try and capture the major move doWn in wave -v-, which should run down back to the 40/42 area, to complete all of wave b also.

From there, we expect a massive move higher:

 

Long 5 positons, NOW risking to 59.33!                                                                                                         

S&P500

Over the last couple of Posts we have shown on the 120 Min Chart a couple of Options for the S&P. One Option was bearish and indicated that a major top had occurred at 2134.72. In this “bullish” Option wave *i* ended at 2102.54 and we are now looking for a rally to 2126.22 to complete all of wave *ii*.

In the bearish case, we are now rallying in our second wave .c, which has a minimum target of 2134.72, and a projection of 2146.29. At this point both Options remain valid.

We are short 3 S&P500 positions at 2115, risking to 2135.00…and will add 5 more short positions at 2065.  

USDX

That’s a big picture look at the US dollar index.

The USDX continued lower in the overnight session reaching 96.72, at the time that this Post was being written. As we indicated in yesterday's End of day Post, we likely still working on part of a continuing wave *iv* of -v- correction or part of a continuation of wave *iii*. Wave *iv* might become a triangle. Our updated EWave analysis for all of wave -v- is: 

^i^ = 95.94;

^ii^ = 94.89.

^iii^ = 97.87, if complete;

^iv^ 96.72, if complete;

Projections for the end of wave *iv* are:

23.6% retracement = 97.17

38.2% retracement = 96.73. We have now reached this low, so a rally in wave ^v^ could be about to begin.

^v^ to go, to at least the wave -iii- high of 100.71.

Wave ^iii^ projections are:

^iii^ = ^i^ =97.67

^iii^ = 1.618^i^ = 99.39;

^iii^ = 2.618^i^ = 102.17

We still cannot rule out the possibility that: "We do have a bit of a concern with wave -iv- ended at 93.16, in that it was relatively short in time compared to wave -iii-. This could indicate that wave -iv- is actually not complete at 93.16 and that it could be becoming a triangle or something even more complex. At the moment we have no way of knowing, so we will stay with the idea that wave -iv- ended at 93.16.

Here’s a look at the Ewave action on the USDX, via the weekly chart:

NATGAS

It looks like from 2.60 to 2.67, we have a small completed impulsive sequence and since that time we have fallen to a low of 2.64, in what appears to a corrective manner, on the intraday chart. This is bullish. The 50% retracement of the run from 2.60 to 2.67 is 2.64.

This could be the first positive sign that wave .ii. is complete at 2.60, and would suggest that Option 1 is going to turn out to be the correct outcome for this market!!!

We will give this market one more day to decide. If our thinking is correct, we should now start to rally sharply above the 2.67 high. A drop below 2.60 now would likely suggest that Option 2 is going to be the likely outcome.  

Our current valid Options as follows:

Option 1: Wave -i- ended at 3.11 and we are now falling in wave -ii-. Our maximum retracement level is:

78.6% = 2.61

Option 2: We have completed a three wave rally from 2.48 to 3.11 and this market is heading back to 2.48. If this analysis is correct, we are not sure how this 3 wave rally would fit into the bigger wave ii picture, at the moment. 

Long 3 positions, risking to 2.47.

HUI/GDX

See the attached 120 Min GDX Chart:

Remember that since we are in a triangle the legs of the triangle will consist of a single or multiple three wave patterns, and possibly a triangle or two also.

We continue to work on the assumption that wave (c) ended at 19.17 that we are rallying in wave (d). No change to that assumption.

Investors will be bored as the triangle plays out, but once the price breaks out to the upside, things will get wild.

Long GDX risking to 17.28!

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Email: [email protected]

Website: www.captainewave.com

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