Short Term Update:


Gold continued to falling in today’s day session, as we reached a low of 1083.20, at the time that this Post was being written.


We are pretty much at the 50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement level of all of wave ^iii^ which is 1084.85.


The 61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement level is 1078.40.


On the Intraday Chart the drop from the 1112.20 high to the current low of 1083.20 looks corrective, which supports the following two options:


Option 1.0:     As long we do not trade below the wave ^i^ high of 1081.40, this drop is a deep wave ^iv^ of *c* correction, and when it ends we expect a wave ^v^ rally to at least the wave ^iii^ high of 1112.20 to complete all of wave *c* and wave .b., or;

Option 2.0     We have a very bullish pattern in that wave ^iii^ is subdividing as follows:

!i! = 1112.20;

!ii! = 1083.20, if complete.

!iii! rally is next.


Assuming that we are working on Option 1 above then projections for the end of wave *c* are:


*c* =1.618*a* = 1116.20.

*c* = 2.618*a* = 1159.10  


Our preferred current count for wave .b. is as follows:


*a* = 1088.30;

*b* = 1046.80;


^i^ = 1081.40;

^ii^ = 1057.50;

^iii^ = 1112.20;

^iv^ = 1083.20, if complete;

^v^ rally is next to at least our wave ^iii^ high of 1112.20 to complete all of wave *c* and possibility wave .b.


Longer Term Update:


Our current retracement level for wave .b is:


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 also. A break above the upper red down trend line connecting waves -ii- and -iv-, as shown on the attached Daily Gold Chart would confirm that wave 4 or wave ii of 3 ended at 1045.40.


This idea is gaining some traction, with us, as a few gold stocks are breaking major multi-year downtrend lines which would not support the idea that gold is going lower.


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




Short Term Update:


Crude reached a new low of 29.96, in today’s day session, at the time that this Post was being written. In order to give us some confidence that the 30.42 low is indeed the end of wave b of B, we will want to see a very sharp rally higher as a sign of a major reversal. As we stated in yesterday’s End of Day Post:


“This market is heavily oversold and due for a rally of biblical proportions. We expect the end of wave b of B is very near and its end will announced by a rally of 10 to 15{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} in crude in a single day. We need to see a powerful impulsive wave sequence to develop from the 30.89 low. The final confirmation for the end of wave b will come when we break above the down trend line connecting 43.46 and 38.39.”   


There’s not much more to say about a market that appears to entering a panic sell-off!


Long Term Update:


If our current analysis is correct a major low in wave b of B is at hand and crude is starting a new run back to the $150 area.


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




See the attached Daily S&P and 120 Min S&P Chart.






Short Term Update:


The S&P rallied to start, but then fell back, as crude fell. We are working on the assumption that all of wave (iv) is complete at the 1901.10 low, but it might still be possible that we will see one more drop below this low to complete our second wave .c. of (e).  Only a break now of the wave -c- low of 1867.01, would eliminate this triangle formation and suggest that the S&P is heading much lower.


Upon completion of our wave (iv) triangle we expect to move sharply higher in a wave (v) thrust. This thrust should see the S&P reach all time new highs. Our minimum target is the 2134.72 all-time high. We plan to be long for this entire wave (v) and will likely add on the corrective sell-offs!


Long Term Update:


A large wave (iv) bullish triangle is nearing completion, and we are now long looking to capture all or most of wave (v).


Active Trading Positions: Long 5 positions, with 1900 puts as stops!




Short Term Update:


The USDX reached 99.34 and then sold off, reaching a low in today’s day session of 98.87. We cannot rule the possibly that we are still working on a complex wave *b* correction.  


Long Term Trading Update:


Our updated current count for wave .iv. is:


*a* = 97.59;

*b* = 99.73, if complete;

*c* should now be underway, with a target of at least the 97.59 wave *a* low.


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 want to bring attention to a couple of alternate counts. On the attached Weekly USDX Chart, we have another count for wave -iv-, that suggests it did not end at 92.52, and that we are now falling in wave .c. of -iv-. In this case the minimum target for wave .c. is the wave .a. low of 92.52. 


The other much more bearish count is shown on the attached Weekly USDX(Alternate) Chart. In this our second (a), (b), (c) pattern from the wave i low of 71.33, ended at 100.72 and we are now falling in another 3 wave pattern. Within this 3 wave pattern we are working on wave -c-, with projections of 88.35 and 80.79.  


All of our alternate counts will become valid if we drop below the 96.64 high.


Active Trading Positions: We are now flat!




See the attached Daily NG Chart.



Short Term Update:


NG continued lower in today’s day session, reaching 2.266, at the time that this Post was being written. We are likely still falling in at least wave *a* of wave -b-. We want to repeat that:


“Since we are in a wave -b- we should expect that it will consist of at least one *a*, *b*, *c*, pattern but could become more complete have up to three such patterns, mixed in with some triangles also. It is a bit too early to try and determine what type of internal wave structure that wave -b- will consist of, so we will give this market another day or so to give us more clues.”


We do expect that wave *a* should be ending soon, and that a rally in wave *b* should be the next big event.  


Retracement levels for the end of wave -b- are:


50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 2.089;

61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 1.993


We plan to go long 5 positions at 2.05, to try and capture the upcoming wave -c- rally.


Long Term Trading Update:


Our retracement levels for all of wave (iv):


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- = 2.494, if complete;

-b- drop has begun;

-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 5 at 2.05, risking to 1.69!


HUI/GDX and Selected Gold Stocks:


Short Term Update:


The GDX got crushed today, even though gold did not fall $50!!!

Our short term analysis on the GDX and related gold stocks needs to be re-evaluated as it looks like some of these gold stocks like Kinross could be heading to new lows.


Long Term Update:


Unsure at the moment as a run to below 12.62 in the GDX could now be possible.


The major breakouts in ABX and Kinross have failed which could suggest much lower prices ahead.


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