So we did not expect this drop in gold, considering the weakness in the S&P and the good news was there was almost no movement downward in the HUI/GDX.

Gold failed to hold the downtrend line that we crossed yesterday. At the moment we have no idea what gold is doing in this holiday trade, and would not be surprised to see it drop back to our assumed wave .ii. low of 1170.70.

St comments: Days like this are demoralizing. The banks seem to enjoy ruining every breakout. Our day will come, but it is obviously isn't today for bullion.


We posted the following Intraday Update on Crude:

"Crude has satisfied the minimum requirements for a completed five wave sequence from 56.58 to the current low of 52.58. This could be all of wave -v- of iii of C. The next test will be what happens next. If crude rallies in an impulsive 5 wave sequence then it is likely that wave iii is over. If crude rallies in a 3 wave sequence then crude is going lower, still being in wave -v- of iii., as it subdivides further.

We will see how crude trades from here on the intraday chart, and provide further updates as required"

Crude looks to have bottomed at 52.45 and has since turned higher. We have decided to go long 3 positions at the market, risking to 52.46. If wave iv is now underway we could see a rally of $15/25, over the next couple of months.



Looks we nailed this one, almost to the day! It appears that wave B has ended at 2093.55?

On the intraday day chart from the 2093.55 high, we have the following;

.i. = 2079.53;

.ii. = 2085.58;

.iii. is dropping now.

We are short 2 positions risking 10 ticks above the all-time high, of 2093.55.

Days like today in this market, make up for all of the minor disappointment that occur in other markets from time to time!



See today's updated GDX 60 Min Chart. It looks like wave *ii* of .iii. did not end yesterday, but probably today. Considering how weak gold was the HUI/GDX barely moved by the end of the day. Any update to wave iii, is also follows, with only the end of wave *ii* changed from yesterday:

-i- = 18.91;

-ii- = 17.16;


.i. = 18.48;

.ii. = 18.76


*i* = 18.71;

*ii* = 18.05, if complete.



The USDX made a new high for this wave ii of C rally. Nothing more to add as we still have not changed our view that this market is topping in a very major way. We are still looking for a signal that this rally is over, however!



So much for our idea that wave ii ended at 2.97. It appears that our alternate count was the correct one, with wave .iv. ending at 3.21. NG is now falling in wave .v. of -v- of(c) of iii. Today's low is 2.88, which was our original projection for the end of wave ii. Not sure whether the drop is over, but we will be watching this market in the Sunday overnight session, to see it wave ii has finally ended. We were stopped out of our 2 long positions at 2.96.

Also remember what we said in today's Morning Post: "A break of the down trend line connecting 4.53 and 3.94, would confirm that wave ii ended at 2.88."

We have decided to go at the market, 2 spec positions, risking to 2.87, due to the fact that this market stopped right at our projected level of 2.88. This trade is for speculators only, but with crude likely bottoming in wave iii, this market may turn interestingly to the upside!


Captain out!