JAN 16 MORNING UPDATE

Gold:

After the big run-up in gold during yesterday's day session, gold was relatively quiet in the overnight session. On the intraday chart, from the 1261.00 high, gold appears to trading sideways in a triangle formation, which also appears to be complete. If this analysis is correct then we should expect gold to thrust higher, when gold breaks above the upper trend line of this formation. The trend line connects 1267.00 and 1261.60. Based on the size of the triangle the thrust could be $25 to $30. Our next target for gold is the 1295.00 area.

No change to current 7 long positions but have raised our protective stop to 1204.00!

Crude:

 

We are working on the assumption that all of wave iii ended at 44.21 and that the rally from 44.21 to 51.20 was either a wave (i) or wave (a) within wave iv. The current setback is either wave (b) or wave (ii). We were stopped out of our longs during the pull back from 51.20, but as we indicated in our last End of Day Post, we did re-enter long with 2 positions risking to 44.20. In the overnight session, crude hit a low of 45.95, which is still above our 78.6{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement level of 45.70.

It is not clear whether this correction ended at 45.95, or whether we will revisit that level one more time before turning up in wave (c) or (iii).

 

We still believe that wave iii ended at 44.21, so we have re-entered this market with 2 long positions at the market risking to 44.20.

 

S&P:

 

The S&P was lower in the overnight session and we took massive profits, as our target price was hit. We have nothing new to add to yesterday's End of Day Post, which we have repeated below:

"We provided an intraday update on the S&P suggesting that wave .iv. of -i- likely ended at 2031.25. The attached updated 10 min chart shows that top.

However, since that top was made the S&P did fall today, but the 10 min chart clearly shows that the wave structure is full of overlapping waves. This type of overlapping structure at this location of a 5 wave impulsive drops can mean only 2 things:

·         Wave .v. is a diagonal triangle, as we have shown on the attached chart. Within that diagonal triangle we only need drop in wave *v* to at least the wave .iii. low of 1988.44 to complete the minimum requirements for a completed wave -i-, or;

·         Wave .iv. did not end at 2031.25 and that we are working on a wave .iv. triangle, with only wave *a* ending at 2031.25, wave *b* at 1992.53, and waves *c*, *d* and *e* to go,  to complete the entire triangle formation. After the wave .iv. triangle ends we will drop in wave .v. to complete all of wave -i-.

Our preferred option is the first and is labelled on the updated 10 min chart.

Upon completion of wave -i- the S&P should rally between 50 to 61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} of the entire wave -i- drop, so we plan to take profits on our 4 shorts positions at 1987.00. Based on the close we might get filled during the overnight session!"

We are flat (no positions)

USDX:

 

We are now sure about or trade here as the USDX seems to want to move higher. At the moment we have nothing new to offer in the market.

We still believe that the high at 92.76, is finally the end of our wave iii of C.

We are short 7 positions, risking to 92.77.

 

NG:

 

Please click here now:

https://captainewave.com/wp-content/uploads/2015/01/2015jan16ngew1.png

Next, please click here now:

https://captainewave.com/wp-content/uploads/2015/01/2015jan16ng2ew.png

NG was lower in the overnight session, hitting aa low of 3.03.

As you can see in the attached long term and daily charts, we are now working on the assumption that all of wave ii of C is completed at 2.78. It appears that wave -i- of (i) of iii of C, likely ended at 3.35 and we are now correcting in wave -ii-. In yesterday's End of Day Post we indicated that we were looking to buy NG on the wave -ii- pullback and set a buy price of 3.03. We were filled, in the overnight session.

At the moment we are assuming that all of wave -ii- is complete at the 3.03 low, which is within our 50 to 61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement zone. Watch for an intraday posts to add to these long positions.

We are long 3 NG positions at 3.03, risking to 2.77.

HUI/GDX:

 

No changes yesterday's End of Day Post, as we expect the HUI/GDX to continue higher with gold. We have repeated yesterday's End of Day Post below:

"As expected the HUI and GDX were up sharply today, in line with the large rally in gold. It seems that wave .iv. has ended at 19.88 and we are well within wave .v. of -iii-. Based on that we can provide some projections for the end of wave .v. and wave -iii- as follows:

Projections for the end of wave .v.:

.v. = 1.618(wave .iii. - end of wave -ii-)= 19.88 + 1.618 x (21.89-17.76) = 26.56

Projections for the end of wave -iii-:

-iii- = 1.618-i- = 22.01;

-iii- = 2.618-i- = 23.34;

-iii- = 4.236-i- = 25.47.

Our minimum target for the end of wave .v. is the wave .iii. high of 21.89.

We repeat this sentence from the last couple of Posts:

"Since the wave .iv. correction was so deep we cannot rule the possibility that the GDX has subdivided further. We will monitor this situation and provide and update as appropriate. This possible subdivision really means nothing and if it is true it only means that the HUI/GDX is going to rally higher & faster!"

We remain long all GDX positions

Thanks!!