jan 21 morning post!





Short Term Update:


Gold traded below the upper trend line of our potential wave *b* triangle, and we did not trade above the wave ^d^ high of 1109.90.


In the overnight session gold reached a low of 1096.50, this low could be all of wave ^e^, and if that is the case our wave *b* triangle is also now complete and the next big event in gold will be a thrust higher in wave *c*, to complete all of wave .b.. The minimum target for wave *c* is the 1113.10 high.


Our current wave *b* triangle formation looks like:


^a^ = 1046.80;

^b^ = 1113.10;

^c^ = 1071.10;

^d^ = 1109.90, if complete

^e^ = 1096.50, if complete to complete all of our wave *b* triangle.


Retracements for the end of wave .b. are:


50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 1118.60;

61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 1135.80.


Once we are sure wave *b* is complete we can also provide projections for the end of wave *c*.


The above triangle formation has now become our preferred analysis for gold, so we can eliminate some our current options:


Option 1: Wave .b. is now complete at the 1112.20 high:


This Option is eliminated.


Option 2: A major low in gold has occurred at 1146.80 in wave 4 or wave ii of 3:


This Option is eliminated.  


Option 3: Wave .b. is still underway but is becoming more complex:


This is now our preferred *a*, *b* triangle, *c* thrust Option, as wave .b. has become more complex, as this Option suggested. Our current count for wave .b. is:


*a* = 1088.30;

*b* triangle = 1096.50, if complete;

*c* thrust higher is next with projections shown above, for end of all of wave .b.


Longer Term Update:


Wave .b. has now become more complex and we expecting further gains to complete all of wave .b. Upon completion of wave .b., we expect a drop back to the 1045.40 low, in wave .c., to complete a major low in gold in either wave 4 or wave ii of 3.


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




Short Term Update:


The March contract is now the front month and there is a price difference between the old February Contract and the new March Contract.


Comments now will be related to the Continuous Daily Crude Chart and the March Contract until March expires.


On the Intraday Chart, we do NOT see any signs of a bottom in the market. As we indicated in yesterday’s End of Day Post, it looks like Suncor has further to fall to each our minimum target of 13.10.


We plan to buy Suncor at 13.05.


The next drop in crude, which might be its final bottom could coincide with the wave *c* thrust in gold.


Based on what we have seen in January so far, it seems that the US Stock and crude are now linked, so a major bottom in crude will likely drive stocks higher. It appears we are not there just yet.


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. Going to long Suncor at 13.05!




Short Term Update:


The S&P Futures are down about 5 points, at the time that this Post was being written. We have many reservations with this market as it relates to EWaves, unless we base our analysis on a major top occurring at the 2116.48 or 2134.72, but the wave patterns do not support that idea, without including failure analysis.


We are not prepared to do that just yet, so for the time being will see how this market develops. It is due for a huge rally and if crude bottoms, we will likely get that rally.


Long Term Update:


Unknown at the moment.


Active Trading Positions: Flat!




Short Term Update:


The USDX reached 99.31, in the overnight session, at the time that this Post was being written. We are still within our triangle upper and lower trend lines, whether you support the bullish or bearish version. We have repeated most of yesterday’s End of Day Post:


“We have the bullish triangle case as follows:


*a* = 97.72;

*b* = 99.73;

*c* = 98.14;

*d*= 99.40;

*e* = 98.68, if complete, to complete all of wave .iv. triangle.


Until we break the wave *b* high of 99.73, this current triangle formation could continue to expand. If this triangle formation is correct, then all of wave .iv. would be complete at the 98.68 low and we should expect a wave .v thrust to rally to at least the 100.71 high.


Our bearish case remains valid also and we repeat it below:


“We also need to be on guard for a different outcome for wave .iv. In this case our current triangle is not bullish but bearish and that pattern is as follows:


*a* = 97.21;

*b* triangle is now

*c* drop to at least the 97.21 wave *a* low to complete all of wave .iv.”


A drop below 98.14, would suggest that the bearish case is unfolding.


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 98.13!




Short Term Update:


NG rallied to 2.167 in the overnight session, at the time that Post was being written. No change to our current thinking, so we have basically repeated yesterday’s End of Day Post below:


“This type of trading is more of the overlapping structure that we normally see in wave .b. rallies. No change to our current outlook, as we still expect wave .b. is NOT complete and that we should at least rally to our 50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement level which is 2.271.Our current retracement level for all of wave .b. are:


50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 2.271;

61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 2.324


Upon completion of wave .b. we expect one more drop in wave .c. to at least the wave .a. low of 2.045 to complete all of wave -b-.


Retracement levels for the end of wave -b- are:


50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 2.089;

61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 1.993


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. = 2.045, if complete;

.b. rally is underway;

.c. drop to at least the wave .a. low of 2.045, 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: Long 5 at 2.05, risking to 1.69!


HUI/GDX and Selected Gold Stocks:


Short Term Update:


If gold thrusts higher in wave *c*, we expect the GDX and related Gold Stocks to rally, but outside of our stellar flagship stock CRJ, Kinross and ABX are still pointing lower. It’s too bad most gold stocks don’t have the performance CRJ does over the past year, but it’s coming!


Kinross has reached its minimum objective, but we still have a low at 1.07 that likely needs to be challenged ABX is likely heading back to 5.89, and we should be almost complete wave ^iv^ in our favorite gold junior: CRJ.


The wave *c* thrust in gold, could see CRJ return back to the 0.95 high to complete all of wave *iii* of -v-.


Long Term Update:


We have now satisfied the minimum requirements for a completed wave B and are now looking for evidence of a bottom.


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!


Note: End of Day Post might be a little later today.