Captain Ewave End of Day Update



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Gold was higher today as the S&P and USDX headed lower.

(St comments: That’s an understatement)

We are now working on the assumption that wave ^iv^ ended at the overnight low of 1273.30. Based on that assumption we are now in a position to project the end of wave ^v^ and .iii. Since wave ^iii^ is about the same length as wave ^i^, we should expect that wave ^v^ is going to extend and be the longest wave of this 5 wave impulsive pattern. We still have the alternate count where wave ^iii^ is still underway and within wave ^iii^, wave *i* ended at 1307.00 and wave *ii* at 1273.30.

As we pointed out in the HUI/GDX section below also, we are looking for a cluster of endpoints for these projections. History shows that these points tend to be the likely point for the market to stop.

Projections for the end of wave ^v^:

^v^ =0.618(^i^) = 1321.00;

^v^ = ^i^ = 1350.50;

^v^ = 1.618(^i^) = 1398.20

Projections for the end of wave .iii.:

.iii. = 2.618.i. = 1374.90;

.iii. = 4.236.i. = 1477.60.

So, we have range of projections from 1321.00 to 1477.60 with no apparent cluster of endpoints, like you will see in the HUI/GDX analysis below. For the time being we will watch to see how wave ^v^ subdivides, to see if we can refine our projections further. For the time being we are focusing on the 1375.00 level as the end of wave ^v^ and .iii.

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



Crude was higher in the day session, trading reaching a high of 46.31, without going to at least 44.35 before moving higher. This could mean that wave (b) ended as a failure at 44.81. Our current thoughts on wave iv are updated below:


-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. = 46.36, if complete;

.v. = 44.81 to complete all of wave (b).

We will give this market another 24 hours, before we finally conclude that wave (b) ended at 44.81. We do not really like the failure analysis here.   Thus, we hold puts on our longs!

We are long 4 positions, with $44 puts.




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The S&P continued sharply lower during the day session as it appears that wave (iii) has now begun. We are working on the assumption that wave (ii) ended as failure at 2057.62, as noted on the attached chart.

In the short term we likely finished wave .i. of -i- of (iii) at 2019.91 and are now rallying in wave .ii. Within wave .ii., wave ^a^ ended at 2039.60. We should now drop in wave ^b^ and then rally again in wave ^c^ to at least the wave ^a^ high of 2039.60, to complete all of wave .ii. Our 50 to 61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement zone for wave .ii. is 2038.77 and 2043.21 respectively.

Will add 2 additional short positions at 2044.00, risking to 2064.00.

Since waves (i) and (ii) are now complete we can provide projections for the end of wave (iii) as follows:

(iii) = (i) = 1957.00;

(iii) = 1.618(i) = 1894.00. (Preferred Target)

(iii) = 2.618(i) = 1792.90.

As the S&P falls we will see how wave (iii) subdivides and refine our preferred target as we work lower. We have lowered our stops to 2063.

We are short 4 S&P at the market, risking to 2063.



The USDX is continuing lower in our wave .iv. correction, as we suggested. We are not sure what corrective pattern wave .iv. is taking at the moment, but we have repeated our retracement levels below:

23.6 {6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} of wave .iii. = 93.96;

38.2{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} of wave .iii. = 92.79.

Today’s low was 93.95, which is at the upper bound of our retracement zone for this wave .iv. correction. Although we are not sure of the internal wave structure of this correction we doubt that it would be over in such a short period of time. We expect more up and down overlapping waves, before this correction ends.




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



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We are working on the assumption that wave -iv- of (iii) ended at 21.13, and that the current rally is wave -v-. The completion of wave -v- will also end wave (iii). So then the next order of business will be to try and determine where we think wave -v- and (iii) will end.

The most reliable projection will be if we get a cluster of end points from the calculations for the end of wave -v- and (iii) that produce almost the same endpoint. You may recall that in last weekend’s Special Report on the USDX that we had a cluster at exactly 97.38.

Projections for the end of wave -v-:

-v- = wave –iii- high = 23.22

-v- = 0.618(-iii- - end of wave (ii)) = 21.13 + 0.618(23.22-17.76) = 24.50;

-v- = 1.618(-iii- - end of wave (ii)) = 21.13 + 1.618(23.22-17.76) = 29.96.

Projections for the end of wave (iii):

(iii) = 4.236(i) = 25.97;

(iii) = 6.25(i) = 29.89.


So we have a range of projections from 23.22 to 29.96, and we draw your attention to the highlighted numbers of 29.89/29.96. For the time being we will watch to see how wave -v- subdivides, but we must respect the possibility that the GDX is heading to the 30.00 area for the top of wave -v- and (iii).

St comments: I think all Golden Ewave Riders would like to see that!

Wave -v- will consist of an impulsive wave sequence. In the short term we should be expecting the end of wave .i. of -v- to end shortly….probably around 23.22.

We will move our stops to 21.12 after we trade above the wave -iii- high of 23.22.


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

St comments: Go Gold!!! What a fabulous day to be long gold stocks and short the Dow. Ride the Golden Ewave, to the honey pot zone!!!