jan 13 morning post!

CAPTAIN EWAVE MORNING POST!

 

Gold:

 

https://captainewave.com/wp-content/uploads/2016/01/2016jan13gew.png

 

Short Term Update:

 

Gold reached a low of 1079.60, in the overnight session, at the time that this Post was being written. This drop to below the wave ^i^ high of 1081.40, has now eliminated our current preferred count, as wave ^iv^ cannot overlap with wave ^i^. The other Options that we now have are as follows:

 

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;

*iii*:

^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, 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!

 

Crude:

 

Short Term Update:

 

Crude did NOT make a new low in the overnight session, and was in fact up slightly 31.41, at the time that this Post was being written. On the Intraday Chart we do NOT see an impulsive sequence from the 29.95 low to the 31.41 high, so we should assume that crude is still going lower.

 

The current pattern could develop into an impulsive sequence, but we will need a sharp break above the overnight high for that to occur. 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 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!

 

S&P: 

 

Short Term Update:

 

The S&P Futures was up about 11 points in the overnight session. Nothing new to add to our last End of Day Post comments, so we have repeated most of them below:

 

“ 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!

 

USDX:

 

Short Term Update:

 

The USDX rallied a little higher in the overnight session, reaching 99.40, at the time that this Post was being written. On the Intraday Chart the rally from 98.14 to the current high of 99.40 is full of overlapping waves.  This would suggest that we might now be working on a wave .iv triangle formation that looks like:

 

*a* = 97.72;

*b* = 99.73;

*c* = 98.14;

*d* rally is now and cannot rally above the wave *b* high of 99.73;

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

 

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;

.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!

 

NG:

 

Short Term Update:

 

NG was relatively stable in the overnight session, reaching a low of 2.241, before recovering a little. We are likely still falling in the final stages of 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:

 

https://captainewave.com/wp-content/uploads/2016/01/2016jan13crj.png

 

Short Term Update:

 

If our current preferred option in gold is correct, then we should now expect that the GDX, ABX and Kinross will make new lows, before wave B ends. CRJ is still moving higher and as shown on the attached Daily CRJ Chart, we might have completed all of wave ^iv^ at the 0.84 low. For current analysis to remain valid, CRJ cannot fall below the wave ^i^ low of 0.82.

 

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!!   

 

Note: The End of Day Post will be later than normal today.