Technical Analysis Of The Markets

Gold

As you can see on the attached daily Gold Chart, we have reluctantly decided to label the 1191.50 high as the end of wave ^iii^, and the current corrective setback being wave ^iv^.

In the overnight session gold reached a low of 1167.30. What is clear to us that the drop from 1191.50 to the current low of 1167.30, is corrective, which supports higher prices, above the 1191.50 high, once this correction ends, if it has not already done so at the 1167.30 low.

If the current drop is wave ^iv^ then our 38.2% retracement would be 1170.30, which is pretty close to our current low of 1167.30. We are simply not sure that all of the current correction is complete at the 1167.30 low.

When we are sure that wave ^iv^ is complete we will provide projections for the end of wave ^v^.

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

*i* = 1156.40;

*ii* = 1103.80;

*iii*:

^i^ = 1153.50;

^ii^ = 1136.00;

^iii^ = 1191.50;

^iv^ = 1167.30, if complete;

^v^ to go to complete all of wave *iii*.

Projections for the end of wave *iii* are:

*iii* = 1.618*i* = 1198.80;

*iii* = 2.618*i* = 1257.50. This is our preferred target.

Here’s our updated long term chart.

Note the beautiful bull wedge pattern that is set to launch our “Golden C Wave”!

We are long 20 positions, now risking to 1151.00, with big  profits lock!

Crude

Crude moved a little lower in the overnight session, reaching 46.15. We believe we are still working on the internal wave development of our wave !iv! triangle, and specially on wave $d$ of that formation.

At the moment we have no indication that wave $d$ is complete, at the current low of 46.15..

Wave $d$ cannot drop below the wave $b$ low of 45.25, for this triangle formation to remain valid.

Upon completion of wave $d$ we should see a wave $e$ rally to complete all of wave !iv!.  As always, triangles like to extend, so we could be in this formation for most of this week.

Our current count for all of wave ^c^ of *ii* is 

!i! = 49.23;

!ii! = 49.92;

!iii! = 46.64;

!iv!:

$a$ = 48.43;

$b$ = 45.25;

$c$ = 47.91;

$d$ = 46.15, if complete;

$e$ rally to go, to complete all of the wave !iv! triangle;

!v! drop to at least the 43.21 low to complete all of wave ^c^ and *ii*.

Our current preferred count, since the low of 37.75 was made is:

*i* = 49.33;

*ii*;

^a^ = 43.21;

^b^:

!a! = 48.42

!b! triangle = 43.97;

!c! = 50.91, to complete all of wave ^b^;

^c^ drop is now (details above).

A projection for the end of wave ^c^ is: ^c^ = 1.618^a^ = 41.01. 

We expect the end of wave ^c^ and all of wave *ii* to be within the following retracement levels:

50% = 43.54;

61.8% = 42.19.

We plan to go long 8 positions at 43.20, and buy 42.00 puts, as stops!                                                                            

S&P500

The S&P futures are down about 5 points at the time that this Post was being written.  We believe that we are very close to completing all of wave (ii).

Once wave (ii) ends we should see an initial sharp drop down, as the first signal that wave (ii) is complete.

If we assume that wave (ii) is complete at the 2034.45 high, then our first projection for the end of wave (iii) is: 

(iii) = 1.618(i) =1604.48!

We are short 15 positions with 1975 calls!

USDX

The USDX was lower in the overnight session reaching 94.63, at the time that this Post was being written. We suspect that we are in wave *e* of .b. and doubt very much that it is complete at the 95.05 high.

We think that only our first leg higher is complete at the 95.05 high and that the current drop is the second leg of our 3 wave rally which forms all of wave *e*. That possible 3 wave pattern looks like:

!a! = 95.05;

!b! drop is now:

!c! rally back at least to the 05.95 high to complete all of wave *e*.

Wave *e* could become more complex than a simple 3 wave pattern, or it could become a triangle. The other option we are watching is that wave *d* may not be complete at the 93.83 low, and that we might see one more push below that level to complete wave *d*.

Wave *e* cannot rally above the wave *c* high of 96.88, for our wave .b. triangle option to remain valid.   

Our wave -iv- counts is very complex and looks like:

.a.:

*a* = 94.88;

*b* = 100.26;

*c* = 93.17, to complete all of wave .a..

.b. triangle:

*a* = 98.41

*b* = 92.54;

*c* = 96.88;

*d* = 93.83;

*e* rally is underway and subdividing as detailed above, to complete all of wave .b.

.c. drop to go, after the wave .b. triangle ends, and then this will complete all of wave -iv-.

NatGas

NG rallied slightly higher in the overnight session, to 2.489.  We are now expecting one final drop to complete all of wave .v. of -v- of (iii)

Our minimum target for this final drop is 2.404, and we will likely be placing a buy order in the next 24 to 48 hours, to try and be long the upcoming wave (iv) rally!

HUI/GDX

We are working on the assumption that wave -iii- is complete at the 17.04 high and we are now correcting in wave -iv-.

The GDX had a low of 15.61, in yesterday’s trading which is basically at our 38.2% retracement zone, which is: 

38.2% = 15.57.

We are not sure that all of wave -iv- is complete at the current low, but if wave ^iv^ is gold is complete at 1167.30, then we suspect that the wave –iv- low in the GDX is also complete at the 15.61 low, also!

Our current count is :

-i- = 14.71;

-ii- = 13.19;

-iii-:

.i. = 14.71;

.ii. = 13.19;

.iii. = 15.77

.iv. triangle = 15.73;

.v. = 17.04, to complete all of wave –iii-;

-iv-= 15.61, if complete;

-v- rally to at least the 17.04 high to complete all of wave (i).  

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

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Email: [email protected]

Website: www.captainewave.com

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