jan 1 end of week post!

CAPTAIN EWAVE END OF WEEK POST!

 

Gold:

 

https://captainewave.com/wp-content/uploads/2016/01/jan12016goldew.png

 

Short Term Update:

 

As expected gold reached a slightly lower low in Friday's day session, reaching 1057.50. Based on what we see on the Intraday Chart, we cannot confirm that the 1057.50 low is the final low for this current correction.

 

As you are aware we have been working on the assumption that wave .a. of -v- ended as a failure at 1046.80. We are not big fans of wave analysis that uses failures to make counts work, and we have suggested what is in gold for some time.

 

As you can see on the attached Daily Gold Chart we have revised our count slightly to indicate that all of wave .a. ended at 1045.40, and that we are now rallying in wave .b., with the following current count:

 

*a* = 1088.30;

*b* = 1046.80;

*c*:

^i^ = 1081.40;

^ii^ = 1056.50, if complete;

^iii^ rally is next.

Our confidence level with our current count in our gold is low at the moment. Although the drop from 1081.40 to the current low of 1056.50 on the Intraday Chart has lots of overlapping waves, which suggest it is some kind of correction.

 

Longer Term Update:

 

We have revised our current retracements for the end of wave .b., based on wave .a. ended at 1045.40:

 

50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 1118.60;

61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 1135.80.

 

Wave .b. is expected to consist of at least one *a*, *b*, *c* pattern.

 

There is an outside chance that all of wave 4 or wave ii of 3 is complete at the 1045.40 low.

 

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

 

Crude:

 

Short Term Update:

 

Considering we were trading on the last day of 2015, crude had a very exciting day. As we had said in our last Morning Post, crude has satisfied all of the requirements for a completed !a!, !b!, !c! correction. When it traded below the wave !a! low of 36.62, except that we had failed to reach our 50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement level of 36.15. That made us skeptical that all of wave ^ii^ was complete at the 34.42 low. Our expected wave ^ii^ retracement zone which is: 

 

50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 36.15;

61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 35.62.

 

In Friday’s day session crude reached a low of 36.23, before moving sharply higher, in what has now turned out to be a key reversal day higher. That is 8 ticks short of our 50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement level. 

 

So based on Friday's day session trading, our count for all of wave ^ii^ is:

 

Our current count for all of wave ^ii^ is:

 

!a! = 36.62;

!b! = 37.94. Note the 78.6{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement level is 37.90.

!c! = 36.23, if complete to complete all of wave ^ii^.

 

So is wave ^ii^ complete? On the Intraday Chart, the rally from 36.24 to 37.76 was a clear complete impulsive wave sequence. After the market reached 37.76 we dropped to a low of 36.88. The drop to 36.88, from 37.76, was about a 61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement of the rally from 36.23 to 37.76.

 

Taking into account that we rallied impulsively out of the 36.23 low that we also have a key reversal day higher. We are NOW working on the assumption that all of wave ^ii^ is complete at the 36.23 low. We should now be working on wave ^iii^ high, which appears to already be subdividing.

 

Long Term Update:

Our updated current wave (iv), looks like:

 

-a- = 49.33:

-b-:

*a* = 43.21;

*b* = 50.91;

*c* ending diagonal triangle = 33.98, to complete all of wave -b-;

-c-:

*i*:

^i^ = 38.28;

^ii^ = 36.24:

^iii^:

!i!= 37.76;

!ii!= 36.88, if complete;

!iii! rally is next.

 

Projections for the end of wave ^iii^ (assuming wave ^ii^ ended at 36.23) are:

 

^iii^ = 1.618^i^ = 39.36;

^iii^ = 2.618^i^ = 40.89

 

Projections for the end of wave -c- are:

 

-c- = 1.618-a- = 52.72;

-c-= 2.618-a- =  64.30: Our preferred target.

 

Active Trading Positions: Long 15 positions, with 42.00 puts, as stops. Plus long 5 positions with 37.00 puts, as stops!

 

S&P: 

 

https://captainewave.com/wp-content/uploads/2016/01/jan12016spew.png

 

Short Term Update:

 

Nothing is ever easy when it comes to this market. The S&P was sharply lower in Friday's session, eliminating our current short term count. We are still in wave .c. of -v-, but waves *i* and *ii* has changed, as shown on the attached 120 Min S&P Charts. Our assumption is that we were already in wave *iii*, which appears to have been a bit premature. Our updated count for all of wave .c. is:

 

*i* = 2081.56;

*ii* = 2043.83, if complete;

*iii* rally is next.

 

Our retracement values for wave *ii* are:

 

50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 2043.52;

61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 2034.54

 

We are currently just shy of our 50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement level with the current low of 2043.83. We might see a little more weakness on Monday, but we expect that the next big event will be the start of our wave *iii* rally.

 

Long Term Update:

 

We are now expecting to move higher in wave *iii* as the next big event, and will provide projections for its end, when we are sure that all of wave *ii* is complete.

 

Active Trading Positions: None!

 

USDX:

 

Short Term Update:

 

We indicated in our last Morning Post, that this market should now be heading at least to 98.66 high. On Friday we achieved that, and actually reached our exact 61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement level for all of wave ^ii^ at 98.84. We have now completed all of the minimum requirements for a completed wave ^ii^ at the 98.84 high.

 

If our current analysis is correct, most of wave ^ii^ should now be complete. We should start heading sharply lower in wave ^iii^ of *c* of .iv.

 

Long Term Trading Update:

Our updated current count for wave .iv. is:

 

*a* = 97.59;

*b* = 99.35;

*c*:

^i^ = 98.01;

^ii^:

!a! =98.66, if complete;

!b! = 97.84;

!c! = 98.84, if complete to complete all of wave ^ii^. Our retracement levels for all of wave ^ii^ are:

 

50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 98.68;

61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 98.84

 

Wave ^iii^ drop should begin now.

 

Our current count for all of wave -v- is:

 

.i. = 96.64;

.ii. = 93.83;

.iii. = 100.58;

.iv. is still underway;

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

We are also watching our alternate count, and need to see a drop below the 96.64 high for this alternate to become active.

 

Active Trading Positions:  Short 5 at 99.25, risking to 99.40!

 

NG:

 

https://captainewave.com/wp-content/uploads/2016/01/jan12016ngew.png

 

Short Term Update:

 

In Friday's day session NG rallied to 2.376.

 

We had originally thought that all of wave .i. had ended at 2.385, and that we had started wave .ii. of -a- lower. Although that might still be the case, we now think that the first impulsive wave sequence out of the wave (iii) low of 1.693 is NOT complete at the 2.385 high.

 

We said in our last Morning Post: We cannot rule the possibility that this current correction is a wave *iv*, within wave .i., but we will consider our alternate at the moment. We now do not consider an alternate as our preferred. Therefore, we should now expect that NG will rally above the 2.385 high to complete its first impulsive wave sequence out of the 1.693 low.

 

In terms of our count labelling, we believe that we are working on a wave (iv) rally. As a minimum, wave (iv) must consist of at least one -a-, -b-, -c- pattern, or it can be a triangle.

 

We have said before, that for the time being, we are assuming that wave (iv) is going to become a simple -a-, -b-, -c- pattern. Until this move matures enough, and then if necessary, we will modify that assumption accordingly.

 

As you can see on the attached Daily NG Chart, we have modified this first impulsive sequence out of the wave (iii) low, to be an almost complete wave -a-, as opposed to just wave .i. of -a-.

 

This change is based on the fact, that the rally from 1.693 to the current high of 2.385 is a very large price change, and looks out of proportion to just be wave .i. of -a-.

 

We have modified our count within wave (iv), below accordingly.

 

In terms of our trading strategy nothing has really changed, as we plan to go long on this market at the wave -b- low, which we expect to retrace between 50 to 61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} of the entire wave -a- rally. We will provide the new retracement zone, once we are sure that wave -a- is complete.

 

Long Term Trading Update:

 

Our retracement levels for all of wave (iv): Note that we have eliminated the 23.6{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement zone. As the market has already reached that target with the wave (iv) pattern still being far from complete:

 

38.2{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 2.91;

50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 3.29.

 

For the time being, we will assume that wave (iv) is a simple -a-, -b-, -c- pattern, and within that count we have:

 

-a- = 2.385, if complete:

-b- drop is next

-c- rally to at least the wave -a- high, but more likely to our 38.2{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1}/50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement zone shown above.

 

Active Trading Positions: Plan to buy again, when we drop into our yet to be determined wave -b- retracement levels!

 

HUI/GDX:

https://captainewave.com/wp-content/uploads/2016/01/jan12016gdxew.png

https://captainewave.com/wp-content/uploads/2016/01/jan12016crjew.png

https://captainewave.com/wp-content/uploads/2016/01/jan12016kinrossew.png

https://captainewave.com/wp-content/uploads/2016/01/jan12016abxew.png

 

Short Term Update:

 

No much happened in the GDX in Friday's session. The current wave *ii* low of 13.57 has held. We are still waiting for confirmation that wave *ii* has ended at the 13.57 low.

 

Upon completion of wave *ii* we expect a sharp rally in wave *iii*as the next big event in this market.

 

We have also attached the Daily CRJ, Daily Kinross and 120 Min ABX charts. Both the Daily Kinross and 120 Min ABX Charts are indicating that the next move is higher.

 

The CRJ Chart shows that if wave *d* is complete at the 0.79 high, then we should expect a small pullback in wave *e* to complete all of the wave -iv- triangle. Only a break of the 0.82 wave *b* high, would NOW eliminate our wave -iv- triangle option for CRJ, but suggest that we are going much higher, in a subdividing wave -v-.

 

Long Term Update:

 

It looks like wave B ended at 12.62, and we have started wave C higher. Within the initial stages of wave C, we have the following count:

 

-i- = 17.04;

-ii- = 12.92;

-iii-:

.i. = 13.95;

.ii. = 13.19;

.iii.:

*i* = 14.29;

*ii* = 13.57, if complete;

*iii*higher is next.

 

We need to see a break of 15.61, to confirm our current count for this market....wave B ending at 12.62.

 

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