jan 27 morning post!

CAPTAIN EWAVE MORNING POST!

 

Gold:

 

Short Term Update:

 

Gold was relatively quiet in the overnight session. Our current high for wave *c* of .b remains 1123.20.

 

Over the last couple of Post we talked about a cluster of projections at the 1135.00 area, and we are not waiting to see if gold is headed there to complete all of wave *c* and .b., or whether all or most of wave *c* is complete at the 1123.20 high.

 

On the Intraday Chart the drop from 1123.10 to the overnight low of 1116. 30 looks corrective, which suggests that when this correction ends gold is likely going higher, which puts our 1135.00 projected target area into play as the next big event.

 

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!

 

Crude:

 

Short Term Update:

 

Crude dropped to a low of 30.15, in the overnight session, at the time that this Post was being written. On the Intraday Chart the drop from yesterday’s high of 32.41 to the overnight low of 30.15, look corrective, so in the short term at least we expect crude to continue to move higher… at least above the 32.74 low.

 

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, we 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!

 

S&P: 

 

Short Term Update:

 

The S&P Futures are lower by about 8 points in the overnight session, at the time that this Post was being written. We believe that are we are still working on wave .ii., so we expect this market to move back to at least the 1875.97 low, but more likely to at least the 50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement level of wave .i. which is 1860.57. We have repeated most of yesterday’s End of Day Post below:

 

“We are working on the assumption that we are now rallying in wave (v), to all time new highs. Within that rally, we think we completed wave .i. at 1908.85, and the current setback is wave .ii. Our retracement levels for wave .ii. are:

 

50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 1860.57;

61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 1849.18.

 

Yesterday’s low was 1875.97, which is still above our 50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement level of 1860.57. Based on that we still believe that we are in a wave .ii. correction, and we should drop again to at least the 1860 level to complete all of wave .ii.

 

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!

 

USDX:

 

Short Term Update:

 

The USDX is starting to weaken a bit more, as we reached a low 98.87, in the overnight session at the time that this Post was being written.

 

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

 

*a* = 97.21;

*b* = 99.89, if complete;

*c* drop is now;

*d* and *e to go.

 

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 short, risking to 99.90!

 

NG:

 

Short Term Update:

 

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;

*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;

-b-:

.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:

 

No change to our current comments for the GDX and Selected Gold Stocks. On the Intraday Chart of CRJ, we expect more more new high above the 1.00 level to complete wave *iii* of -v-.

 

Long Term Update:

 

We do 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.