Captain Ewave Jan 22 Morning Update



We are working on the assumption that wave ^iii^ ended early yesterday at the 1305.10 high, and that we are now correcting in wave ^iv^. We did show this on the Daily Gold chart that we attached in yesterday’s End of Day Post.

We also provided our retracement zone for wave ^iv^ as being between 1274.35 and 1285.90. During yesterday’s day session we hit a low of 1284.90, but suggested that even though that low was within the upper bound of our retracement zone, the internal wave structure on the intraday chart was telling us that the 1284.90 was going to be revisited. In the overnight, gold did as we expected and reached a low of 1279.70.

This value is still within our retracement zone! It also appears on the intraday chart that a completed three 3 setback can be seen from the 1305.10 low to the overnight low of 1279.70. Wave ^iv^ could now be over and we are now heading higher in wave ^v^. Only a break above the 1305.10 high would confirm to us that wave ^iv^ is over at the 1279.70 low.

Once we are sure that wave ^iv^ is complete, we will provide projections for the end of wave ^v^ and all of wave .iii..

We note that there is still an outside chance that wave ^iii^ could still be extending, but we will consider that option as our alternative. In this case an extended wave ^iii^ is headed to our next target of 1349.00, which is the ^iii^=1.618^i^ projection.

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



As we have been saying for a number of days now, crude appears to be working on a wave (b) triangle within a larger wave iv of C correction. Wave iii ended at 44.20 and wave (a), within wave iv ended at 51.20. We have also been saying and will continue to say that triangles like to expand are difficult to analysis in real time. In yesterday’s End of Day Post we provided this count for our wave (b) triangle:

“-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.”

In the overnight session it looks like crude has spiked higher and is on the verge of taking out the wave -b- high of 49.14, with the current high at the time that this Post is being written is 49.07. So, it looks like wave (b) ended at 47.06. If this is the case then we can now project the end of our wave (c) thrust as follows:

(c) =a) = 54.06

(c) = 1.618(a) = 58.39

We plan to take profits on our long positions within that range. We will provide and intraday post if this happens.

We caution however that this triangle may still expand and that in this case the current rally from the wave -a- low of 45.96 could only be a complex wave -b-. This triangle could last a week or so more. Only a break of the wave (a) high of 51.20 will confirm that the triangle is over.

We are long 4 positions, risking to 44.20.




No change to yesterday’s End of day Post, so we have repeated it here:



“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.




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

In the overnight session NG dropped and it appears like it is going to revisit our assumed wave *ii* low of 2.87. We have modified our current count as shown below:

*i* = 3.00;


^a^ = 2.87;

^b^ = 3.05;

^c^ is now and should trade to at least the wave ^a^ low of 2.87, to complete all of wave *ii*.

After completion of wave *ii* we should ally sharply in wave *iii*.

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



In yesterday’s End of Day Post we attached the updated 60 Min GDX Chart. We believe that wave -iii- ended at 23.22 and that the current setback is wave -iv-. The chart also showed a possible .a., .b., .c. pattern for wave -iv-, with wave s .a. and .b. possibility complete at the values shown on the chart. We also provided the following retracements for the end of wave -iv-:

23.6{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 21.93;

38.2{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 21.08.

We are therefore expecting the HUI/GDX to drop in wave .c. to complete all of wave -iv-, likely within the above retracement zone. 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).

There is an outside chance that wave –iii- did not ended at 23.22 and the HUI/GDX is going to go higher from here, but we will have this option as our alternate.


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