jan 14 morning post!


Short Term Update:

Gold was lower in the overnight session, reaching a low of 1084.80 at the time that this Post was being written. No change to our current options, 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). 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^ = 1079.60, if complete
^iii^ rally will be next.

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. 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 was quiet in the overnight session. 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!

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:

We have attached the updated daily and 120 Min S&P Charts, that reflects yesterday’s actual low of 1886.41. AS you can see on the attached daily S&P chart we are have now reached the bottom trend line of our large wave (iv) triangle.

If this triangle is now ending, as we suspect, then is a good place to start to move higher in wave (v). 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!

The S&P Futures are up about 8 points at the time that this Post was being written.

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:

Our current wave .iv. triangle formation remains intact, after the overnight session trading. The low in that session is 98.64, which could be the end of all of wave .iv. If that is the case then we should expect a sharp thrust higher to develop that will see the USDX rally to at least the 100.71 high, as the next big event. Of course, when it comes to triangles they do like to extend.

We have decided to go long this market to try and capture the wave .v. thrust. We will risk to 97.20, in case the triangle wants to expand and extend. A break above the 99.73 high would likely suggest that our wave .v. thrust is underway.

Our current wave .iv. triangle looks like:

*a* = 97.72;
*b* = 99.73;
*c* = 98.14;
*d*= 99.40;
*e* = 98.64, if complete, 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. = 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!!


Short Term Update:

NG dropped to a low of 2.224 in the overnight session, at the time that this Post was being written. WE indicated in yesterday’s End of Day Post that the rally from “2.241 to 2.320 looked corrective, so we expect that wave *a* of -b- is still underway.”

If wave -b- is going to consist of at least one *a*, *b*, *c* pattern, then we suspect that wave *a* is getting pretty close to coming to an end, after which should see a wave *b* rally that should retrace 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:

Short Term Update:

No change to our last End of Day comments, so they are repeated below:

“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, 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!!