Technical Analysis Of The Markets

Gold 

Short-Term Update

In the overnight session gold reached a low of 1270.00 at the time that this Post was being written.

On the Intraday Chart, since the high of 1306.00 was made, the wave patterns continues to be made of a series of overlapping waves in both directions.

This type of wave pattern is indicative of a triangle formation.

As we know from the theory of EWaves, wave ^ii^ cannot just be a triangle, but a triangle can be part of that formation.

For a wave *iv*, a triangle can be all of that wave structure.

So, both of our options remain valid.  We need to wait and see how we progress over the next couple of days to see is any of our current options are eliminated.  

We are still leaning to our preferred count, which suggests that all of wave *iii* is complete at the 1306.00 high, and perhaps wave *iv* is developing into a bullish triangle. Our current analysis will remains unchanged.

If wave *iii* is complete at the 1306.00 low, then we expect the current drop is wave *iv*, and our retracements for the end of wave *iv* are;

23.6% = 1247.10;

38.2% = 1210.70.

if we are still in our wave ^v^ thrust, then it is subdividing and our count would look like:

!I! = 1306.00;

!ii! = 1258.00;

!iii! is now underway.

Just in case wave !ii! is still not complete those retracements are:

50% = 1267.30;

61.8% = 1258.10.

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 little way to go, before this sequence is complete. We should now be falling in wave *iv*.

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

Crude

Short-Term Update:

No surprise to us as crude marched higher in the overnight session reaching 48.42 at the time that this Post was being written. We are still working on wave !iii! of ^iii^ and see no end in sight, and expect higher prices in the days ahead. We should at least test the $52.00 area but we have a higher projected target at 55.62. No change to our current analysis.  

Our current count is:

^i^ = 43.69;

^ii^ = 39.00;

^iii^:

!i! = 46.78;

!ii! = 43.04;

!iii! rally is now underway. Our first projection for the end of wave !iii! is: !iii! = 1.618!i! = 55.62

Projections for the end of all of wave ^iii^ are:

^iii^ = 1.618^i^ = 52.67;

^iii^ = 2.618^i^ = 61.11.

Our first projection for the end of wave *iii* is:

*iii* = 1.618*i* = 61.84.

No change to our Suncor analysis as we expect all or most of wave .b. is complete at the 27.50 high, and that we should see one more drop in wave .c. to at least the wave .a. low of 25.31, but more likely to our retracement levels, before all of wave -ii- ends.  Retracement levels for all of wave -ii are:

50% =24.31;

61.8% = 22.98

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: Buy at 42.50, risking to 38.99.

S&P500

Short-Term Update

The S&P Futures were down about 3 points in the overnight session, at the time that this Post was being written.

There is no change to our current thinking that wave -iv- is likely not complete at the 2039.45 low, and is either becoming a double 3 wave correction, or possibly a bullish triangle.    

Our expected retracements levels are as follows:

23.6% = 2057.41;

38.2% = 2025.61.

Long-Term Update

Wave -i- of (v) is complete at the 1946.70 high; wave -ii- at 1891.00, and wave -iii- at 2111.05. Wave -iv- could now be complete at the 2039.45 low, but we need to be on guard for something more complex happening in this corrective wave, before we are ready to confirm its completion.

Upon completion of wave -iv, we expect a wave -v- rally to complete all of wave (v) and a major top in the S&P.

Our minimum target for the end of wave (v) is the all-time high of 2134.72, and from there some sideways grind, and the meltdown to below the 2009 financial crisis lows.

Active Trading Positions: Flat.

USDX

Short-Term Update

The USDX reached a low of 94.36 in the overnight session, but the Intraday Chart is suggesting that the drop from 94.84 to 94.36 is a correction, so a run back to at least the 94.84 high seems likely in the short term.

Although we still are not prepared to provide an updated short term count it is possible again that the USDX might make one more run back to the 100.71 high. We struggle with that idea as we believe that gold has now entered a new multi-year bull market.   

Long-Term Trading Update: Uncertain.

Active Trading Positions: Flat.

HUI/GDX and Selected Gold Stocks

Short-Term Update:

We expect the current corrections for GDX and our selected gold stocks to continue to develop.

GDX 

As you can see on the 60 Min GDX Chart, out triangle idea was eliminated. It now looks like wave ii is taking on the following corrective pattern:

(a)    =  23.29;

(b)   =  25.61, if complete;

Wave (c) drop is next.

Upon completion of the wave (b) we expect a sharp drop in wave (c) to our retracement zone to complete all of wave ii.

ABX  

We believe that we are working on a wave (ii) of iii correction. Our new count for all of wave (ii) is:

.a. = 17.21;

.b. = 19.14, if complete;

.c. is now underway, if wave .b. is complete. 

Our target for all of wave ii is the retracement zone shown on the attached ABX Chart. 

KGC 

As you can see on the 60 Min KGC Chart, we think that this stock is correcting within the following count:

(a)    =  5.03;

(b)   =  5.80;

(c):

^i^ =  4.93

^ii^ = 5.41, if complete;

^iii^ drop is next, once wave ^ii^ is complete 

Long-Term Update

Our first impulsive sequence out of wave B lows of the GDX and our selected gold stocks, is likely now complete at the current highs and we are correcting in wave ii, except in ABX, which will be correcting in wave (ii) of iii.

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

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