Jan 21 eod update


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After some exciting moments his morning, when we thought that gold would continue higher in wave ^iii^, it decided to turn lower. In an Intraday Post we advised that wave ^iii^ had ended at 1305.10. On the attached Daily Gold Chart the end of wave ^iii^ is 1307.00, which is just slightly above our ^iii^=^i^ target of 1301.80. We are likely now moving lower in wave ^iv^.

Also in today’s Intraday Post we provided our expected 23.6 to 38.2 {6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement zone for the end of wave ^iv^. Those values are 1285.90 and 1274.35, respectively. It is difficult to say at the moment what form wave ^iv^ is going to take, but as a minimum it will be at least one 3 wave corrective type looking pattern, although it could also be a triangle. Specifically, within wave ^iv^ we appear to have fallen in an impulsive fashion from 1305.10 to today’s low of 1284.90, and have rallied from 1284.90 to 1295.90, in a corrective fashion; with lots of overlapping waves on the intraday charts. This indicates to us that the wave ^iv^ correction is not over at today’s low of 1284.90.

There is also an outside chance that wave ^iii^ could still be extending, but we will consider that option as our alternative.

No change to current 7 long positions, risking to 1225.00.



In an Intraday Post today, we indicated that crude had completed the minimum requirements of a completed wave (b) triangle, but also warned that the triangle was likely going to expand. Shortly after we sent out that Post the triangle expanded. It currently looks like:

-a- = 45.96;

-b- = 49.14;

-c- = 46.41;

-d- = 48.19;

-e- = 47.06, if complete, to complete all of the wave (b) triangle.

Our warning about this triangle continues as we cannot rule out the possibility that it will continue to expand over the next week or so.

When the wave (b) triangle finally does end we are expecting a sharp thrust higher in wave (c). Projections for the length of wave (c) are either:

Length of wave (a) = $7.00

1.618 x length of wave (a) = $11.33

We are long 4 positions, risking to 44.20.




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The S&P rallied sharply early this morning and then fell back. At that time we had though that all of the second wave .c. had ended. This initial wave .c., spike ended below our 2031.00 shorting price, so we provided an Intraday Post and indicated that we were going short at the market with 4 positions, risking to 2057.

Later in the morning the market rallied again to 2036.26, which is very close to our 61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement target of 2035.28. We are now working on the assumption that all of wave -ii- of (iii) has ended at 2036.26, and that we are now going to fall sharply in wave -iii- of (iii).


We are short 4 positions, risking to 2057.



Nothing new to add here and we repeat today’s Morning Post comment: “No sign of a top here, as the rally wave patterns are impulsive looking and the setbacks corrective looking, on the intraday charts”




Our best count for this market is that all of wave -ii- ended in a very deep correction at 2.82.

St comments: the captain’s work around that 2.81 – 2.82 area is arguably the greatest technical analysis of any market in the past 12 months. Now, back to the captain:

In the day session we hit a high of 3.00, before turning lower. On the intraday charts, the rally from 2.82 to 3.00 looks impulsive, and the setback from 3.00 to today’s low of 2.87 looks corrective. So to us that means we are going higher. So if wave -ii- ended at 2.82, our current EWave count within wave -iii- is:

*i* = 3.00;

*ii* = 2.87;

*iii* is now, with our initial projection for the end of *iii* being *iii*=1.618*i*=3.16.

We are long 3 NG positions at 3.03, risking to 2.81.



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The HUI/GDX made a high of 23.22 today, before turning lower, which is only 13 ticks below our projected level for the end of wave -iii- which was 23.35. We are now falling in wave -iv- and have a retracement zone for its end at:

23.6{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 21.93;

38.2{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 21.08.

Like gold it is a little too early to determine the internal wave structure of the wave -iv- correction, but as a minimum it will consist of at least one .a., .b., .c.  pattern, but could also be a triangle. As an note, a triangle pattern can only appear by itself, in an impulsive 5 waves pattern, in a wave -iv- position only. You cannot have a triangle, by itself in a wave -ii- position.  It could be possible that wave .a. ended at 22.10 and we are now rallying in wave .b., which may have ended at 22.71.

Upon completion of wave -iv- we are expecting the rally in the HUI/GDX to continue in wave -v- of (iii). When we are confident that wave -iv- has ended, we will provide projections for the end of wave -v- and (iii).


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