jan 14 end of day post!





See the attached Daily Gold Chart.




Short Term Update:


Gold was lower in today’s day session reaching 1071.10. All of our current options remain valid, but some of them are becoming very unlikely, with details under each Option Section.


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). This option is now our preferred as the drop in gold is starting to accelerate, although we do NOT have a clear impulsive sequence from the 1112.20 high!

The attached Daily Gold Chart shows this option.


This option will be eliminated if we now rally above the 1112.20 high.


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^ = 1071.10, if complete.

^iii^ rally will be next.  


Retracements for the end of wave ^ii^ are:


61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 1077.80;

78.6{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 1068.40.


A drop below the 78.6{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement level would eliminate this option.


A sharp rally now above the 1112.20 high, would support this outcome.


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.


This option is the most difficult to identify in real time. We need a rally above the 1112.20 high to keep this option alive.


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 was gaining some traction, as a few gold stocks were 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 rallied to a high of 31.75, in to today’s day session at the time that this Post was being written.


As we said in today’s Morning Post: On the Intraday Chart we see NO evident of an impulsive wave sequence from the 29.96 low, so we are expecting that this low will be challenge again. We cannot rule the possibility that crude might see a very sharp, short lived sell-off to mark its final low.”


Even after today’s trading this previous comment remains valid. In fact, on the Intraday Chart from the 32.91, it looks like crude is working on a bearish triangle, which remains incomplete.


If this triangle observation is correct, then next event upon its completion will be a thrust lower to at least the 29.95 low. This thrust however, could be the sharp sell-off that announces the end of all of wave b and B.


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:


The S&P made a slightly lower low to start today’s trading session, reaching 1878.73 and then moved sharply higher throughout the day.


If our current wave (iv) triangle option is correct, then we should now be heading sharply higher in wave (v) to all time new highs, as the next big event.


We have attached the updated daily and 120 Min S&P Charts, that reflects today’s low of 1878.73. 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.


Our minimum target for all of wave (v) 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 completed at 1878.73 and we are now heading sharply higher in our wave (v) thrust.


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




Short Term Update:


At the time that this Post was being written, the USDX was sitting just below the down trend line connecting waves *a* and *c*. A sharp break above this line would give our first indication that our wave .iv. triangle is complete based on the following count:


*a* = 97.72;

*b* = 99.73;

*c* = 98.14;

*d*= 99.40;

*e* = 98.64, if complete, to complete all of wave .iv. triangle.


A break above the 99.73 high would likely confirm that our wave .v. thrust is underway. If we break above the wave *d* high of 99.40, and then fail to break above 99.73 and then fall back, then it is likely that this triangle is expanding and extending.


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. = 98.64, if complete (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 long 10 positions, risking to 97.20!




See the attached Daily NG Chart.


Short Term Update:


The drop in NG continued as we appear to still be working on wave .a. of -b-, as we reached a low of 2.128, at the tie that this Post was being written.


On the Intraday Chart, we still do not see an end to wave .a., but do believe that it is not very far away. Upon its completion, we should expect a wave .b. rally, which should retrace between 50 to 61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} of the entire wave .a. drop.


The attached Daily NG Chart show the graphical path for our assumed .a., .b., .c. pattern within wave -b-.


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;


.a. = 2.128, if complete;

.b. rally is next;

.c. drop to at least the wave *a* low to complete all of wave -b-;

-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:


As we had suggested the GDX is now heading towards our minimum target of 12.62, to complete all of wave B. The GDX and related gold stocks were sharply lower today. Today’s low in the GDX was 13.00.


ABX, and Kinross were sharply lower today while CRJ is the bullish one(!), reaching 0.835. This is likely still part of our wave ^iv^ correction. ABX and Kinross are likely heading to new lows.


Long Term Update:


We are now heading to at least the 12.62 low to complete all of wave B.


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 and ABX back to 5.89.


CRJ is likely completing wave ^iv^ and should be heading higher in wave ^v^, or wave ^iv^ could become a triangle.


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