Technical Analysis Of The Markets

Gold

Short-Term Update

 

Gold was sharply higher in the overnight session reaching 1236.40, at the time that this Post was being written!

At the moment, we are working on the assumption that all of wave ^iv^ ended at the 1210.30 low, but we have some concern still, about the failure that has occurred on the creation of this low.

We cannot rule the possibility that wave ^iv^ is still underway and our two possible triangle formations also remain in play as other options.

Only a break of the 1280 level would confirm that all of wave ^iv^ is complete at the 1210.30 low. The good news:

Even if we are working on one of our triangle options gold should continue to rise, but would fail to break above the 1280 level, until the triangle formation ends.

A rally to at least the 1247 level is likely underway.  Upon completion of these triangle options, we would then expect our usual thrust higher.

We said this in yesterday’s Post: “On the Intraday Chart the drop from 1225.50 to the overnight low of 1216.00 is full of overlapping waves, which suggests that gold is going to be heading higher if 1216.00 is the end of this corrective sequence.”

Our updated count for wave (3) of 3 is as follows:

*i* = 1088.30

*ii* = 1046.80;

*iii*:

^i^ = 1081.40;

^ii^ = 1056.60;

^iii^:

!i! = 1113.10;

!ii! = 1071.10;

!iii! =1263.40, 1262.90(Daily Continuous Futures);

!iv! triangle =1225.30;

!v!= 1280.70, to complete all of wave ^iii^.

^iv^ = 1210.30, if complete;

^v^ rally is now underway, to complete all of wave *iii*, and likely subdividing as shown above.

*iv* correction will be next, after wave *iii* ends.

Longer-Term Update

Based on the current count, gold is still working on its first impulsive sequence out of its wave (2) of 3 low, and we still have a long way to go before this sequence is complete.

Wave ^iv^ has become more complex and once it is complete, if it is not already at the 1210.30 low, then we should expect a wave ^v^ rally, which when complete will complete all of wave *iii*. The wave *iv* correction should retrace between 23.6 and 38.2% of the entire wave *iii* rally.

Projection for the end of wave *iii* is:

*iii* = 6.25*i* = 1314.90.

Active Trading Positions: Long 20 positions, with puts at 1085.00!

Crude

Short Term Update 

Crude continued to drop in the overnight session, as we reached 35.24, at the time that this Post was being written.  We believe we are falling in at least wave ^a^ of *ii*. 

We are now working on the idea that all of wave *i* ended at the 42.49 high and that we are now correcting in wave *ii*. Our retracement levels for all of wave *ii* are:

50% = 34.27;

61.8% = 32.33.

The current low is still above our 50% retracement level, so it seems like that this drop is just wave ^a^ of *ii*. If that is the case then our wave *ii* count would be:

^a^ = 35.24, if complete;

^b^ rally is next, after wave ^a^ ends;

^c^ drop to reach our expected retracement levels shown above, to complete all of wave *ii*.  

We should expect our wave ^b^ rally to begin soon.

No change to our comments relative to Suncor as we are working on the idea that all of wave -i- is complete at the 28.32 high and a drop in wave -ii- is the next big event. 

Long-Term Update

We are now working on the assumption that a major low in wave b of B was reached at the 26.05 low.

If this assumption is correct, then crude is now heading sharply higher, at least back to the all-time high of 147.27.

Active Trading Positions: We will go long at  33.25, risking to 30.00!

S&P500

Short-Term Update

 

The S&P Futures were down about 16 points in the overnight session, at the time that this Post was being written. It is starting to look like all of wave .iii. of -iii- could be complete at the 2075.07 high, and if that is the case then we should now expect the S&P to drop in wave .iv., as the next big event.

Wave .iv. is expected to retrace between 23.6 to 38.2% of the entire wave .iii. rally. Those retracement levels are:

23.6% = 2041.28

38.2% = 2020.37

Upon completion of wave .iv. we expect one more rally in wave .v. of -iii-, with a projected target for its completion of:

-iii- = 1.618-i- = 2112.02

Long-Term Update

Wave -i- of (v) is complete at the 1946.70 high, and wave -ii- at 1891.00. We should now be heading to our second projected target for the end of wave -iii- and once that wave is complete, we should expect drop in wave -iv-. Our minimum target for the end of wave (v) is the all-time high of 2134.72.

Active Trading Positions: Flat!

USDX

Short-Term Update

The USDX continues to trade near its current lows. On the Intraday Chart, a case can be made that a small bearish triangle formation is now under development.

WE probably need another day or so for this formation to be complete. Only a break of the 95.10 high would eliminate this triangle formation.

If our current thinking is correct, then once this triangle pattern completes then we would expect the USDX to thrust to new lows for this current sell-off.

We still expect prices to continue to fall in wave $iii$  of *iii*. Note our first projection for the end of wave $iii$ below.

Our updated count for all of wave *iii* is:

^i^ = 97.03;

^ii^ = 98.42;

^iii^:

!i! = 95.94;

!ii! =97.09,:

!iii!:

$i$ = 94.61;

$ii$ = 96.42;

$iii$ drop is now underway, with a projection of: $iii$ =1.618$i$ = 92.41

Our current count for wave -c- is:

.i. = 97.59;

.ii. = 99.95

.iii.:

*i*:

^i^ = 98.45;

^ii^ = 99.88;

^iii^ = 96.04;

^iv^ = 97.50:

^v^ = 95.28, to complete all of wave *i*;

*ii* = 98.59;

*iii* is now underway, and likely subdividing, as shown above.

We have the following projections of all of the wave .iii. drop:

.iii. = 1.618.i. = 94.53;

.iii. -= 2.618.i. = 91.18;

.iii. = 4.236 i = 85.76.

Long-Term Trading Update

It looks like wave *iii* continues to subdivide to the downside which is very bearish for this market.

Active Trading Positions: Flat!

HUI/GDX and Selected Gold Stocks

Short-Term Update

With gold rallying again, we expect the GDX and our selected gold stocks to move higher today. 

GDX  

As you can see on the attached 60 Min GDX Chart it now appears that our wave -iv- triangle has expanded and likely ended at the 19.32 low.

AS you can see this bullish triangle has become very complex , with wave .b. having a triple corrective sequence. If this wave -iv- triangle is now complete, then we should expect our wave -v- thrust higher will be the next big event.

Our minimum target for wave -v- is 21.42. The end of wave -v- will also mark the end of wave (iii).

SSO (Silver Standard)

As shown on the attached Daily SSO Chart, It looks like wave ^b^ of .b. was not complete at the 6.95 low, but possibility at the 6.92 low. If wave ^b^ is finally complete at the 6.92 low then we should expect a sharp rally in wave ^c^. This will complete all of wave .b. of *ii*

The details for all of wave .b. look like:

^a^= 7.78;

^b^= 6.92, if complete;

^c^ rally should be underway to complete all of wave .b., with retracement levels of:

50% = 8.32;

61.8% = 8.65.

We do have a ^c^=1.618^a^ projection of 8.29, which falls into our retracement level for all of wave .b. also. This is shown on the attached Daily SSO Chart.

Upon completion of wave .b., we expect one more drop in wave .c. to complete all of wave *ii*. Wave .c. is expected to at least reach the wave .a. low of 6.94.    

KGC (Kinross)

As you can see on the attached 60 Min KGC Chart we have taken a more bullish count, with our wave .iv. triangle still ending at 2.89, and we now believe that our wave .v. thrust is subdividing, and has a much higher prices ahead, before it ends!

It looks like wave .v. is subdividing as follows:

^i^ = 3.58

^ii^ = 3.21, if complete, with our 50% retracement level being 3.24.

^ii^ rally is now.

Long-Term Update

The GDX and all of our selected stocks/indices have finally completed their respective wave B lows. We are still expecting higher prices, as we complete our first impulsive sequence out of their respective wave B lows.

Active Trading Positions: We are long the GDX, ABX, KGC, NEM, CRJ, and TSX:XGD with no stops!!

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