Captain Ewave AM Update:

st comments: the captain is travelling extensively for his Peng consulting biz this week... Only thursday should have any interuption to his postings, and none to his analysis.  thanks!




Gold was lower in the overnight session, eliminating our triangle option. The overnight low at the time that this Post was written was 1276.90. We mentioned in our last several Posts that the option for wave ^iv^ was a flat type correction. The wave structure from the wave ^iii^ high of 1305.10 to the current low of 1276.90 is full of over overlapping waves which indicates correction to us. We are still within our 38.6{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement zone also. Although we have rallied off the 1276.90, we are not sure whether all of wave ^iv^ has ended at that low.

Since the triangle option has been eliminated, there is still a chance that wave ^iii^ did not end at 1305.10.

 St comments: None of the crackhead gurus that shorted gold at 1180 and bot at 1305 think it’s possible for gold to rise above 1305 now. I’m as open to a blast over 1305 as I am to a decline a bit lower…

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



We believe that wave iii in crude ended at 44.20, and that current rally is all or part of wave iv. We have updated out current wave iv analysis as follows:


-a- = 46.77;

-b- = 45.03

-c- = 51.20, to complete all of wave (a).


-a-= 45.96:


.a. = 46.19;

.b. triangle = 47.13;

.c. = 49.07, a 12 tick failure.

-c- diagonal triangle:

.i. = 45.88;

.ii. = 47.75;

.iii. =  44.35;

.iv. rally is now;

.v. drop to complete all of wave c- and (b).


Upon completion of wave (b) we will expect a sharp wave (c0 rally to at least the wave (a) high of 51.20, but likely higher.

We have bought 44.00 puts to protect our long positions.

We are long 4 positions, with $44 strike puts.



The S&P was up in the overnight session, In general, we see no change to the comments we made in our last End of day Post and have repeated them here:.

“We are ahead of schedule and have attached our updated 10 Min S&P Chart that shows the detailed EWave count within our -a-, -b-, -c- correction, that started at the wave (i0 low of 1992.44. Let us take a bit of time talking about the details around wave (ii), as it is clear that we have a five wave impulsive drop from the wave b high of 2093.55 to 1992.44.

Let’s look at wave -a-. Wave -a- consists of a double .a., .b., .c. pattern. This analysis is the same as we had in our previous count except that we have adjusted the level of the corrective waves from -a-, -b-, -c- to .a., b., .c. Because wave -a- does not consist on an impulsive five wave sequence, wave b-must either be a flat or an irregular type correction. In this case it is a flat. In the case wave -b- consist of three .a., .b., .c. patterns, that end at 1988.12. Now for wave -c-. With all of the overlapping waves, wave -c- can only be a diagonal triangle that will consist of five waves. Because this is diagonal triangle each leg must consist of at least one ^a^, ^b^, ^c^ pattern. In this case wave .iii., consisted of two .a., .b., .c. patterns.

So within wave -c-, it is likely that we have completed all of wave .iv. at today’s low of 2050.54 and are now looking for one more ^a^, ^b^, ^c^ pattern rally  in wave .v. to complete all of wave -c- and (ii). Our minimum target for the end of wave .v. is the wave .iii. high of 2062.14.

We shorted the S&P at the opening and will add 2 more short positions at 2063.00, risking all to the 2094.”

We note that a break of the lower up trend line on the 10 Min Chart, before we rally higher, would likely indicate that all of wave (ii) ended at 2062.14

We are short 4 S&P, risking to 2094.



Thanks Over the weekend we issued a Special Update on the USDX, which suggests that a top is near around the 97.38 level.

In the overnight session that USDX hit 95.85, and then turned lower. This is likely our wave .iii. top. We did have a projection for the end of wave .iii. at 95.98. So we believe that we are now working on the wave .iv. correction. Our longer term trading strategy for this market is as suggested in our Special Weekend Post.




Nothing new to report here. We are still reviewing our current analysis and will provide and update when it is complete.



With gold being lower we would expect that wave -iv- did not end on Friday at 21.62. We now expect to hit of .c.=1.618.a. projection of 21.14, which is close to our 38.2{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement level.


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

St comments: I’m a GDX buyer in that $21 area!