jan 13 end of day post!





Short Term Update:


Gold rallied to a high of 1094.70, at the time that this Post was being written. This rally does not really change any of the potential options that we presented in today’s Morning Post. Those Options all remain valid and are repeated below:


Option 1: Wave .b. is now complete at the 1112.20 high:


In this option wave .a. of would have had to end as failure at 1046.80, as shown on the attached Daily Gold Chart and our count for wave .b. is:


*a* = 1081.40;

*b* = 1056.50;

*c* = 1113.10.


We are now heading lower in wave .c. to at least the 1045.40 low to complete all of wave .c. of -v- of (c).


Option 2: A major low in gold has occurred at 1146.80 in wave 4 or wave ii of 3:


In this option are would be working on a series of bullish subdividing impulsive wave sequences as follows::


*i* = 1081.40;

*ii* = 1056.50;


^i^ = 1112.20

^ii^ = 1079.60, if complete

^iii^ rally will be next.  


Option 3: Wave .b. is still underway but is becoming more complex:


We had assumed that wave .b. was going to become a simple *a*, *b*, *c* rally, but in this Option something more complex is now happening white which will include a series of *a*, *b*, *c* patterns,


Most gold stocks and the GDX are now supporting Option 1, which we have now adopted as our preferred!


Longer Term Update:


Wave .b. is now complete at the 1112.20 high and we should now be heading lower in wave .c. to complete a major low in gold, in either wave 4 or wave ii of 3.


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 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 low of 30.11, in today’s day session, at the time that this Post was being written. It was not a new low, but we still expect that the 29.95 low is going to be challenged at least one more time. We see no indication of bottom in this market, at the time that this Post was being written. As we stated in yesterday’s Posts, the bulls need this:


“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.”   


Not much more to say about a market that appears to be in a bit of 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 Charts






Short Term Update:


As you can see on the attached Daily and 120 Min S&P Charts, we have relabeled the impulsive sequence our second wave .c. of (e).


Wave *iv* of our second wave .c. likely ended at 1940.34, and we are now falling in wave *v*. Today’s low is 1908.69, at the time that this Post was being written which has satisfied the minimum requirements for completed wave *v*, as we have traded below the wave *iii* low of 1910.01. The next big event in this market is still our wave (v) rally.


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:


We are now working on the assumption that wave .iv. is becoming a triangle that currently has the following count:


*a* = 97.72;

*b* = 99.73;

*c* = 98.14;

*d*= 99.40 if complete. Wave *d* cannot rally above the wave *b* high of 99.73;

*e* drop to complete all of wave .iv. triangle.


If we are now falling in wave *e*, it cannot drop below the wave *c* low 98.14, for this triangle formation to remain valid.


We have now adopted this count as out preferred. Of course, triangles can extend also.


Long Term Trading Update:


We are now working on a wave .iv. triangle formation. Once this formation is complete we should expect a final thrust in wave .v., to reach at least eh 100.71 high.


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


.i. = 96.64;

.ii. = 93.83;

.iii. = 100.58;

.iv. triangle is still underway (detailed count above);

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


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!




Short Term Update:


NG rallied to 2.320, in today’s day session, at the time that this Post was being written. On the Intraday Chart the rally from 2.241 to 2.320 looks corrective, so we expect that wave *a* of -b- is still underway.


This means that the 2.241 low is going to be challenged at least one more time as we continue to work on wave *a* of –b-. Upon completion of wave *a*, we should expect a wave *b* rally that retraces between 50 to 61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} of the entire wave *a* drop.  


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;

-b- drop is underway;

-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:


See the attached Daily CRJ Chart.


Short Term Update:


The GDX rallied to 13.80, in today’s session, but on the Intraday Chart, that rally looks corrective, so we are still thinking that this market is heading back to at least the 12.62 low, before wave B finally ends.


It looks like wave ^iv^ may be complete at the 0.84 low as shown in the attached Daily CRJ Chart for Claude, although it might take many more days for all of wave ^iv^ to develop, as it might become more complex or even a triangle.


If wave ^iv^ is now complete then we should expect a wave ^v^ rally to reach our wave ^iii^ high of 0.95, to complete all of wave *iii* of -v-. The rallies in both ABX and Kinross looks to be corrective also, on their respective Intraday Charts.


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. Kinross is likely now heading to the 1.07 low.


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