JAN 27 MORNING UPDATE

CAPTAIN EWAVE MORNING UPDATE

Gold 

Gold hit a low of 1273.30 in the overnight session before rebounding back to the 1284,00 area.

(ST COMMENTS: MAKE THAT $1290 NOW, WHILE THE DOW IMPLODES DOWN 330!)

In yesterday’s End of Day Post we suggested a possible flat type corrective pattern, where wave *c* was looking like an incomplete diagonal triangle. The overnight trading supports that view and we have updated wave *c* of this wave ^iv^ correction as follows:

*a* = 1279.70;

*b* = 1307.30;

*c* diagonal triangle:

+i+ = 1284.50;

+ii+ = 1296.40;

+iii+ = 1276.90;

+iv+ = 1288.20;

+v+ = 1273.30, if complete to end all of wave ^iv^. We caution that diagonal triangles are like regular triangles as they like to extend also, so we cannot rule out the possibly the 1273.30 is NOT the end of wave *c*. Only will a trade above 1296.40 would confirm to us that this correction is over at the current low 1273.30.

As we also said in yesterday’s End of Day Post, and we have repeated it here:

“Since the triangle option has been eliminated, there is still a chance that wave ^iii^ did not end at 1305.10. Should gold continue to drop and retrace more than 50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} of the wave ^iii^ rally, then we would be thinking that wave ^iii^ is extending with wave *i* of ^iii^  ending at 1305.10, and that the current sell-off would be wave *ii* of ^iii^. This would be a very bullish outcome for gold.”

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

Crude:

 

Crude was stable in the overnight session and the corrective wave iv pattern that we showed in yesterday’s End of Day Post remains unchanged and is repeated below:

“(a):

-a- = 46.77;

-b- = 45.03

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

(b):

-a-= 45.96:

-b-:

.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. drop is now to at least the 44.35 low, to complete all of wave (b).

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

Should crude continue to rally now above 47.75, now we likely will conclude that all of wave (b) ended at 44.35.

We are long 4 positions, with $44 puts.

 

S&P:

 

The S&P is significantly weaker in the overnight session. As we indicated in yesterday’s End of Day Post, if wave .v. failed to reach the previous wave .iii. high of 2062.14, we would do something very rare and proclaim that wave .v. , -c- and (ii) ended at 2057.54. This is considered a wave .v. failure.

Expect the S&P to drop significantly now in wave (iii). We will be proving projections for the end of wave (iii) in today’s End of day Post. We will likely be lowering our stops later today.

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

USDX:

 

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.

Our trading strategy is to let wave .iv. and .v. play out and then look to aggressively short at our 97.38 level.

 

NG:

 

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

HUI/GDX:

 

Wave -iv- appears complete at 21.13, so we are now looking for a wave -v- rally. We will provide projections for the end for wave -v- in today’s End of Day Post. We will likely be raising our stops later today to the bottom of wave -iv-.

 

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