jan 25 morning post!

CAPTAIN EWAVE MORNING POST!

 

Gold:

 

Short Term Update:

 

Gold was higher in the overnight session, reaching 1107.90, at the time that this Post was being written.

 

We continue to work on our wave *b* of .b. triangle, and within that triangle we are waiting for the completion of wave ^e^.

 

At the moment we are assuming that all of wave ^e^ is complete at the 1092.60 low, but until we break above the wave ^b^ high of 1113.10, wave ^e^ might still continue to churn about.

 

When wave *b* ends we expect a sharp thrust higher in wave *c* to complete all of wave .b. Retracement targets for end of wave .b. are shown below, but our minimum target is the 1113.10 high.

 

For our current triangle formation to remain valid we cannot NOW drop below the wave ^c^ low of 1071.10. 

 

Our current wave *b* triangle formation looks like:

 

^a^ = 1046.80;

^b^ = 1113.10;

^c^ = 1071.10;

^d^ = 1109.90;

^e^ = 1092.60, 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*.

 

Our current count for wave .b. is:

 

*a* = 1088.30;

*b* triangle (details above) = 1092.60, 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!

 

Crude:

 

Short Term Update:

 

Crude reached a high of 32.74, in the overnight session before turning lower.  

 

On the Intraday Chart, from the 27.37 low to the current high of 32.74 we appear to have a 3 wave rally in place. If our 3 wave rally turns into an impulsive 5 wave structure then we can assume that the 27.37 low is going to last for a while.

 

Longer term, we still have the Suncor Chart count that if correct is suggesting that crude is going to drop below the 27.37 again in the not to distant future.

 

Long Term Update:

 

We now think that crude is still going lower, before wave b of B, ends with a below $20 as being likely.

 

Active Trading Positions: Long 15 positions, with 42.00 puts, as stops, plus long 5 positions with 37.00 puts, as stops. Going to go long Suncor at 13.05!

 

S&P: 

 

Short Term Update:

 

The S&P Futures were very quiet in the overnight, being down about 5 points at the time that this Post was being written. No change to our last End of Week comments, so we have repeated most of them below:

 

“We have been struggling with this market in terms of EWave analysis, after our wave (iv) triangle formation was eliminated this week. Our challenge has been that we do NOT see an credible impulsive wave structure from the all time of 2134.72 to the current low of 1812.29, unless we adopt some kind of failure analysis.

 

We do not want to do this, unless it is the only option available to us, which we believe it is NOT!

 

The Daily S&P Chart still shows wave (iii) ending at 1975.88, but instead of wave (iv) being a triangle, it now looks like it includes a wave -b- triangle. Our count for wave (iv) is:

 

-a- = 1820.66;

-b- triangle = 2081.56;

-c- =  1812.29, to complete all of wave (iv).

 

If this analysis is correct, then we should expect an impulsive type rally that at least reaches our all time high of 2134.72, to complete all of wave B. We plan to go long this market on its first pullback. A break below 1812.29, would eliminate this wave (iv) option and require us to look at some kind of failure top, as we would expect the S&P to fall sharply lower in that event.

 

Long Term Update:

 

Wave (iv) took a different path then our triangle option, and it now looks like we are heading sharply higher in wave (v), to at least the all time high of 2134.72. 

 

Active Trading Positions: Flat!

 

USDX:

 

Short Term Update:

 

Like the S&P the USDX was also very quiet in the overnight session. We have no change to our last End of Week comments so we have repeated most of them below:

 

“This market continues to churn, but what is clear on the Intraday Chart is that the rally from 92.21 low is corrective. Our wave .iv. triangle was eliminated this week as our thrust to 99.89, was reversed, but the market had not really moved lower. We are now thinking that our wave .iv. triangle could be extending and in that case we would have the following count:

 

*a* = 97.21;

*b* = 99.89, if complete;

*c* drop is next;

*d* and *e to go.

 

A move above 99.89, would indicate that wave *b* is still underway. If wave *c* has begun then we cannot drop below the 97.21 wave *a*, for this current triangle count to remain valid.

 

We are short this market but will raise our stop to 100.59, juts in case wave *b* is not complete the 99.89 high.

 

Long Term Trading Update:

 

It now looks like our wave .iv. triangle is extending and will likely churn for another couple of weeks.

 

Our current count for all of wave -v- is:

 

.i. = 96.64;

.ii. = 93.83;

.iii. = 100.58;

.iv. triangle is still underway.

.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 short, risking to 100.59!

 

NG:

 

Short Term Update:

 

Since our assumed wave .a. low of 2.045 was made, this market has rallied in a overlapping wave structure which support our view that we are in wave .b. The current high for this rally has been 2.189, which is still below our 50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement level which is shown below.  We believe that wave .b. is still underway and that it is still going higher, to at least our retracement zone.

 

Our retracement levels for 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

 

We are currently long this market and will take profits at the end of wave .b. We have put in a sell stop at 2.29, and will buy this market again at the end of wave .c. of -b-.

 

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;

-b-:

.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, but will take profits at 2.29!

 

HUI/GDX and Selected Gold Stocks:

 

Short Term Update:

 

With gold being up we expect the GDX and likely most selected gold stocks will be up at least to start, in Monday’s session. In our last End of Week Post we attached the Long term HUI and XAU Charts, and that suggested further weakness in gold stock, before wave B ends.  

 

In terms of our selected gold stocks, unless wave ^iv^ become a triangle, CRJ is still expect to break above the 0.95 high to complete all of wave *iii* of -v-. ABX is likely working on a complex wave -iv- and should reach the 8.83 high again to complete wave -iv-, and Kinross is still looking weak and should reach its ultimate target of 1.07.

 

Long Term Update:

 

Expect lower prices in the XAU and HUI, before wave B ends. We continue to hold all of our gold stocks and may just start to add more, as this sector is about to turn sharply higher.

 

Active Trading Positions: We are long the GDX, ABX, KGC, NEM, CRJ, and TSX:XGD with no stops!!

 

Note: The Captain will be in the USA between 01/31 and 02/03. Posting should remain unaffected, except on the morning of 02/03, where there will be NO Morning Post.