Short Term Update:


Gold was higher in the overnight session, reaching 1088.70, at the time that this Post was being written. We continue to watch three potential outcomes for gold moving forward, and all of them currently remain valid.


They are described below, with some parameters on when they would be eliminated. We do note that one the Intraday Chart we are now getting some overlapping waves in the drop from 1112.20 to the current low of 1071.10, which is supportive of a possible bullish outcome for gold!


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.


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. As we noted above the overlapping wave structure on the drop from 1112.20 to the current low of 1071.10, might be suggesting this outcome.


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.


Active Trading Positions: Long 20 positions, with puts at 1085.00!




Short Term Update:


We had suggested in yesterday’s End of Day Post that the wave structure on the Intraday Chart support LOWER prices for crude. In the overnight session crude reached a new low of 29.34. On the Intraday Chart the rallies continue to be corrective and the drops are impulsive which continues to suggest lower price, until that pattern reverses. We are pretty confident that we will know when the bottom is in when we get a very high volume $10 plus one day rally in this market.


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!




Short Term Update:


The S&P Futures we down sharp in the overnight session, by about 30 points, at the time that this Post was being written. We could still see one more new low below the 1878.73 low to complete all of our wave (iv) triangle.


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.


Even if the S&P is going to break significant lower we are due for a very large relief rally.


If this relief rally forms a 3 wave pattern, then we will be able to confirm that the S&P is going substantially lower in Q1, 2106, and will NOT be making new highs are we current suggest.


Assuming that we have or are about to complete all of our wave (iv) triangle, 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:


The USDX continued to trade within our current triangle boundaries, in the overnight session. We therefore have nothing new to add to our last End of Day Post, and have repeated most of it below:


“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!




Short Term Update:


NG continued it drop in what we believe to be is wave .a. of -b-. In the overnight session we reached a low of 2.095.


This low is also very close to our 50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement level for all of wave -b- which is 2.089.


We doubt that the current drop from 2.494 to the current low of 2.095 is all of wave -b-, as the drop from 2.494 to the current low of 2.095 looks impulsive on the Intraday Chart. This would suggest a wave .a. drop versus a complete .a., .b., .c. drop. We expect a wave .b. rally is very near.

 Upon completion of wave .a., we the wave .b. rally 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;


.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:


In spite of today’s rally in gold we still expect further downside in the GDX to our minimum target of 12.62, before we should expect a sharp turnaround.


ABX are Kinross are expected to make new lows for this correction, but CRJ might have completed wave ^iv^ at 0.835 is now heading higher in wave ^v^.


We suspect that CRJ is gaining on the collapsing CAD$!


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!!!