Captain Ewave EOD Update


It appears that the correction in gold from the 1244.30 high is taking to the form of a flat type abc three wave move
In this case wave a ended at 1225.40, and wave b ended at 1244.40. Wave c should at least challenge the wave a low of 1225.80, to complete all this correction. In a flat type correction, b wave trades to within 10{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} of the start of the correction.

In this case the correction started at 1244.30 and wave b ended at 1244.40. More importantly, once this correction ends, gold is likely going much, much, much higher.

No change to current long positions or stop locations.



As we have been suggesting for a number of days, the end of wave iii should be announced by a high volume, big price move, which we believe we have now started to see. Crude is now up almost $5.00 in the last 24 hours, hitting a high of 48.84, at the time that this post was being written. Last night we bought 2 positions at 45.02 and today, as we recommended in our Morning Post, we added 2 more at 46.80, and currently risking all to 44.20. In today's Morning Post we provided the commentary below which remains valid, but we have modified to incorporate today's day session trading:

"In the longer term we are working on the assumption that all of wave iii has now ended and that we are now rallying in a multi-month wave iv of C. Since wave iv is a corrective wave it could take many forms(single (a),(b),(c), triangle, multiple (a),(b)(c) patterns... up to 3), and it is a bit too early to say what that form will be. So for the time being we will label the wave iv as follows(from the 44.21 low):


.i.= 46.76;


.iii. is now.


Projections for the end of wave .iii. are:

.iii. = 1.618.i. = 49.14;

.iii. = 2.618.i. = 51.70


We are now long 4 positions, risking to 44.20.


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The S&P continued to fall today as we suggested in today's Morning Post. However, based on today's day session trading we have couple of options on where we are within wave -i- of (iii). We have modified our preferred option to what is shown on the attached updated 10 min chart as follows:

As you can see from the attached chart it appears that we have also a perfect .iii.=1.618.i. projection hit at today's low of 1988.44, or 16 ticks off the exact projected value. We are now rallying in wave .iv. which should retrace between 23.6 and 38.2{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} of the wave .iii. drop. These values are 2004.60 and 2014.60 respectively. For this analysis to remain valid we cannot overlap with the wave .ii. formation which would be 2022.58.

The alternate option is that only wave *i* of .iii. ended at 1988.44 and the current rally is wave *ii*. In this case wave *ii* will retrace between 50 to 61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} of the wave *i* drop. These values are 2022.69 and 2030.77 respectively.

In ether option, after either wave .iv. or wave *ii* end the S&P is going lower. The alternate option is much more bearish in the short term, than the preferred.

We remain short 4 positions with our stops at 2057.00



We were filled on our 2 short USDX position at 91.70, risking to 92.55.

We are working on the assumption that wave ii of C ended at 92.50, which would be a 3 tick failure as the market had an actual high of 92.53. From our presumed wave ii high of 92.50, we look to have the following developing EWave pattern:

-i- = 91.72;

-ii- = 92.42;


.i. = 91.61;

.ii. = 92.17. Note that the 61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement of wave .i. is 92.11.

We will add 2 more short positions at 91.60.




Not much more to say about NG, except you can now see why we were trying to land the bottom on this market. The trend change has been rather dramatic.

During today's day session NG continued to rally sharply after breaking our trend changing down trend line.

As we said in today's Morning Post:

" If this is the beginning of a multi-year wave iii rally, we will have time to enter this market form the low in on the next pullback. We will update our long term and daily NG charts this weekend and provide the next trading opportunity. Looks like we miscalculated the last drop to 2.78.

We suspect that crude and NG will rally together"



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Our concerns relative the shortness of this wave .iv. correction looks to have turned out to be correct, as we continued lower today. Outside of that fact, nothing else has really changed, and we are we are now looking for the end of wave .iv. We cannot say for sure whether wave .iv. ended at today's low of 19.88. Wave .iv. is looking like a simple *a*, *b*, *c* pattern ,as the chart indicates.

 We remain long all GDX positions!