JAN 20 END OF DAY UPDATE

Gold:

 

Please click here now:

 https://captainewave.com/wp-content/uploads/2015/01/2015jan20goldew2.png

After reaching a high of 1294.30, in the overnight session, gold sold off to a low of 1285.10 early in the day session. After that low was made gold has rallied to a high of 1297.10. In today’s Morning Post we suggested that gold was likely working on wave *iv* within wave ^iii^ and we had supplied a retracement range for wave *iv* of between 1279.10 and 1285.10. It looks like wave *iv* ended at 1285.10; the 23.6{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement level!

So within wave ^iii^, we can update the internal wave structure as follows:

*i* =  1267.00;

*ii* = 1255.40;

*iii* = 1294.30; Note that *iii*=1.618*i*=1296.00.

*iv* = 1285.10, if complete. Wave *iv* could also be forming a triangle. A rally above the 1297.10 high would eliminate the triangle option.;

*v* = 1297.10, if complete, to end all of wave ^iii^.

We do have a projection on the daily gold chart of 1301.80(nearest continuous futures). We need to be on guard for the end of wave ^iii^, although we have a higher projection at 1349.80. Should wave ^iii^ be ending then we should expect a wave ^iv^ correction that should retrace between 23.6 and 38.2{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} of the wave ^iii^ rally. We will provide those numbers when we are sure that wave ^iii^ has ended. We have raised our stops to 1225.00.

 

No change to current 7 long positions, although we have raised our stops to 1225.00.

Crude:

 

In today’s Morning Post we talked about the possibly that all of the wave (b) triangle had ended at 47.85. We also indicated that triangles like to extend and that any drop below the 47.85 low, would confirm that this wave (b) triangle was going to extend. Not long after the Morning Post was emailed out, we issued an Intraday Post advising that wave (b) is extending, pretty much as expected. So based on what has happened in today’s day session, the wave (b) triangle has the following make-up:

-a- = 45.96;

-b- = 49.14;

-c- = 46.41. Wave -c- cannot break below the wave -a- low of 45.96;

-d- rally is now and cannot rally above the wave -b- high of 49.14.

-e-  drop will come after wave -d- ends.

As we said in our earlier posts, even if wave -d- rallies above the wave -b- high of 49.14, it likely just means that the triangle is expanding further and in that case all of the trading from the wave -a- would just be wave -b-. We would not be surprised to see this wave (b) triangle most of this week to resolve itself.

Wave (a) ended at the 51.20 high.

The “Special Weekend Post” detailed our trading strategy for this market, which also remains unchanged from those comments.

 

We are long 4 positions, risking to 44.20.

 

S&P:

 

Please click here now:

 https://captainewave.com/wp-content/uploads/2015/01/2015jan20spew1.png

The S&P rallied at the opening to a high of 2028.94, and then proceeded to sell-off. We did have an order in the short at 2031.00, although the 2028.94 high did reach our 50 to 61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement zone. We did issue an intraday post shortly after the sell-off occurred. So the big question is: “ Did all of wave -ii- of (iii) end at 2028.94, and did we miss out on this shorting opportunity”.

In our “Special Weekend Post”, we talked about the likelihood that wave -ii- was going to be come complex and take longer to develop. Since the high at 2028.94 was made it appears that the drop has not been impulsive looking which suggests to us that the S&P is likely going to rally back to at least the 2028.94 high, one more time. before all of wave -ii- ends. So from the wave -i- low of 1988.12 low to the 2028.94 high, we seem to have a clear 3 wave rally. The drop from 2028.94 seems to be full of overlapping waves. Unfortunately there are number of possibly outcomes here and we need to give this market more time to show its hand.

One possible outcome is shown on the 10 Min chart, but we caution there are several others.

 

For the time being we still have our short order in at 2031.00.

What is important is that it appears that all of wave -ii- did not end at 2028.94!

Recommendation: Short 2 at 2031.00, risking to 2057”

USDX:

 

We still need to do some more work on this market, in the days ahead, although our overall view is that this rally is still part of wave ii of C.

 

NG:

 

It appears that wave ii in NG did not end at 2.78, as we have now dropped to far for this setback to be considered a wave –ii- correction. We are now questioning whether wave B did end at 1.90 and cannot rule a possible drop back to that level. It seems likely that NG is going to follow crude. Remember in spite of this current wave iv rally in crude we are still looking for the final low in crude to occur at least the 33.55 level.

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

HUI/GDX:

 

See the attached 60 Min GDX Chart.

 

The HUI/GDX continued higher today with gold. We are getting close to our next target for the end of wave -iii- at 23.35, with today’s high being 23.09. It does not appears that we have a completed a 5 wave impulsive structure from the 19.88 low to the current 23.09 high; on the intraday chart, so we are expecting another push higher, above the 23.09 high.

If gold is completing wave ^iii^ we should expect a possible temporary top in the HUI/GDX. If the end of wave -iii- is at hand then we should expect a drop in wave -iv- that will retrace between 23.6 and 38.2{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} of the entire wave -iii- rally. We will provide those numbers when we are sure that wave -iii- has ended. We have raised our stops to 19.87 !!!

We remain long all GDX positions, with stops at 19.87.”                                                                                                                                                                                       

Thanks