jan 27 end of day post!





Short Term Update:


Gold reached a new high of 1123.80, after the FED comments were released. We are remain on track to move higher!  Ultimately, to our next projected target of 1135.00 for the end of wave *c* and all of wave .b.  


Projections are just that, so we need to be on guard for the end of wave *c* and all of wave .b. to occur at any time, as all of the minimum conditions for a completed wave .b. are now in place.


Our update for all of our current projections and retracements are repeated below:


“With wave *b* being complete at the 1092.60 low, we can provide projections for the end of wave *c*, as follows:


*c* = 0.618*a* = 1119.10;

*c* = *a* = 1135.40;

*c* = 1.618*a* = 1061.90. We doubt this will happen as this type of rally would break the upper red trend line on the attached Daily Gold Chart, which would eliminate the current diagonal triangle formation.


Retracements for the end of wave .b. are:


50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 1118.60;

61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 1135.80.


Our current count for wave .b. is:


*a* = 1088.30;

*b* triangle = 1092.60;

*c* = 1123.20, if complete, although we have higher projections shown above, for end of all of wave .b.


Longer Term Update:


Watch for the completion of wave .b. and the start of wave .c. lower, which has minimum target of the wave .a. low which is 1045.60. Only a clean break of the down trend line connecting 1307.80 and 1191.70, would suggest that much more bullish things are happening in this market.


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




Short Term Update:


As we suggested in today’s Morning Post, crude did trade above the 32.74 high, reaching 32.83, at the time that this Post was being written.


This high was reached in spite of a very bearish inventory report, although it came it a bit below expectations.

In the short term we expect crude to keep moving higher.


As we said in today’s Morning Post:  “We are currently conflicted between what we see as a possible major low in crude at 27.56(daily continuous futures chart), and what we have presented on the Suncor Weekly Chart. As long as the rallies remain impulsive looking and setbacks corrective looking, expect crude to move higher.”


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.!




See the attached Daily S&P Chart.




Short Term Update:


As you can see on the attached S&P chart we made a new high today, above the wave .i. high of 1908.85, and then quickly went lower. We suspect that this brief rally above the wave .i. high of 1908.85 is likely wave *b* of an irregular type wave .ii. correction. We expect further weakness in wave *c* as the next big event in this market. That wave .ii. correction looks like:


*a* = 1875.97;

*b* = 1916.99;

*c* drop to at least the wave *a*  of 1875.97, but more likely to our 50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement level of 1860.57, before wave .ii. ends. Our retracement levels for wave .ii. are:


50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 1860.57;

61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 1849.18.


A significant rally above the wave .i. high of 1908.85 would suggest that all of wave .ii. ended at 1875.97, and that we have started wave .iii. higher.


Likewise, a break below 1812.29, would eliminate our wave (iv) pattern and suggest that the S&P has topped out and is heading substantially lower.


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: Going long at 1850.00, risking to 1812.00!




Short Term Update:


The USDX drooped to a low of 98.75, before recovering in today’s day session. It could be possible that all of wave *c* of our wave .iv. triangle is complete at this low. If that is the case, then we should now be rallying in wave *d* of our wave .iv. triangle formation. A drop now below today’s low of 98.75 would indicate that wave *c* is still underway.


If our wave .iv. triangle is now extending then our current count is:


*a* = 97.21;

*b* = 99.89, if complete;

*c* = 98.75, if complete;

*d* rally is now

*e* drop to complete all of the wave .iv, triangle.


Wave *c* cannot drop below the wave *a* low of 97.21, for this triangle formation to remain valid. A move above 99.89, would indicate that wave *b* is still underway.


The other option for wave .iv. is:


*a* = 97.21;

*b* = 99.89;

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


We have lowered our stops to 99.90.


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 99.90!




Short Term Update:


NG rallied to a 2.211 and then fell back to 2.135, in today’s day session, at the time that this Post was being written. In spite of these movements our comments from this Morning’s Post remain valid and are repeated below:


“We had indicated in yesterday’s End of Day Post that we doubted that all of wave .b. was complete at the 2.214 high and that it was likely becoming more complex. In the overnight session, NG reached a low 2.115 and then rallied back out of our wave *b* triangle formation to a high of 2.205. The drop to 2.115 could be all of wave *x*, in which case we have now started our second *a*, *b*, *c* pattern all within a more complex wave .b. pattern. The other option is that wave *x* is still developing and it that case we will likely revisit the overnight low of 2.115, before it ends, unless wave *x* become a triangle. For the time being we will assume that all of wave *x* ended at 2.115 and that we have started our second *a*, *b*, *c* pattern higher.


Our updated current count for all of wave .b. is:


*a* = 2.170;

*b* triangle:

^a^ = 2.069;

^b^ = 2.189;

^c^ = 2.082;

^d^ = 2.171;

^e^ = 2.129;

*c* = 2.214;

*x* = 2.115, if complete;

*a* is now underway.


Our retracement levels for all of wave .b. remains as:


50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 2.271;

61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 2.324


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.is becoming more complex with the detailed count above;

.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:


The GDX moved a little higher today, but we still are not ready to proclaim a major bottom at the 12.40 low, especially with the possibility that gold could be heading back to the 1045.60 low, as the next big event in that market.


Our Selected Gold Stocks did not do very much today either.


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.