Jan 23 Captain Ewave Morning Update



In yesterday’s End of Day Post we talked about the end of wave ^iv^ of .iii. and our doubts that it had ended at 1279.70; based on the wave structure of the rally from 1279.70 to 1306.60. We use the intraday charts, typically the  15 min chart, to look for these structures. We also added that the setback in the GDX looked incomplete also.

In the overnight session gold was lower, but still above the 1279.70 low. It is still looking like wave ^iv^ is either going to be flat correction, which in this case would now look like:

*a* = 1279.70;

*b* = 1306.60;

*c* to go to at least the wave *a* low of 1279.70, and within our 23.6 to 38.6{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement zone.

Or a triangle, which would look like:

*a* = 1279.70;

*b* = 1306.60. Wave *c* cannot drop below the wave *a* low;

*c* drop is now;

*d* and *e* to go.

At the moment we have a very slight bias to the triangle pattern. If this correction turns out to be triangle, then we can eliminate the possibility that wave ^iii^ is still underway.

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



We indicated in our yesterday’s End of Day Post, that our wave (b) triangle option had been eliminated as we had traded below the wave -a- low of 45.95. We still, however believe that we are in a corrective wave (b) pattern, although what this pattern is not clear to us. It could still be possible that wave (b) could be a triangle with only wave -a- ending at yesterday’s low of 45.89. We will need to give this market another day to show its hand.

We are long 4 positions, risking to 44.20.




As we mentioned in yesterday’s End of Day Post, we were surprised in this rally in the S&P. We were stopped out of our shorts positons.

We will be updating our detailed count over the weekend but as we indicated in the last Post, we are now working on the following assumption:

-a- = 2064.43;

-b-= 1988.12;

-c- = 2064.41, if complete to end all of wave (ii). This looks like a diagonal triangle, due to all of the overlapping waves.

This is a flat type correction.

Looking at the trading from the 2093.55, wave B top, we have a clear five wave impulsive drop from 2093.55 to 1992.44, and now we appear to have a completed  -a-, -b-, -c- rally. From an EWavers point of view this type of formation, 5 waves down, 3 waves up, only means that the next direction that is this market will be taking is 5 waves down! We cannot and will not miss this opportunity to short this market again, although we are going to have to risk to the wave B high of 2093.55.

Just as an argument , even if the drop in the S&P from the 2093.55 was a correction in a continuing bull market,  we would be looking at an abc type formation. Waves a and b are finished. So the wave c drop is now. So assuming that wave b ended at 2065, then some projections for the end of wave c are:

c = a = 1960;

c =1.618a = 1894.

This opportunity is too good to miss!

By the way, we do not believe that the drop from 2093.55 is a correction, but a huge trend change in the S&P. The above was just an example!

So we have now shorted 4 S&P at the market today, risking to 2094.



No end in sight to this rally, as the rallies are impulsive and the setbacks are corrective on the intraday chart. It’s funny how gold has now totally divorced itself from this USDX rally.




NG appears to have stabilized at the 2.80 level as we have now hit that level 3 times, in the last week or so and held. We will need to review our longer term chart on this market, and will advise on our findings over the weekend. This market has not been very good to us, but the Captain does not take “NO” for an answer!



No change to the comments we made in yesterday’s End of Day Post, so we have repeated them here:


“As you can see from the attached 60 Min GDX chart, the rally from the wave .a. low of 22.10 to our assumed wave .b. high of 22.95, is full of overlapping waves. This suggests to us that the low at 22.10 is going to be challenged again, before wave -iv- ends. We also have a projection for the end of wave .c. at 22.14, which is within our retracement zone. This incomplete pattern in the HUI/GDX is why we are skeptical that the wave ^iv^ low in the gold ended at 1239.70.

Upon completion of the wave .b. rally we expect the HUI/GDX to drop, in wave .c., to within our retracement zone to end all of wave -iv-. Wave -iv- could also become a triangle, which we mentioned in an Intraday Post today.

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!