Captain Ewave Is Home From Trip, And Here’s His PM Post Update!


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Gold was sharply lower today, hitting a low of 1252.60.

You might recall last week when we thought that wave ^iii^ was ending at the 1307 level that another potential option that we considered was that only wave *i* of ^iii^ ended at 1307, and not all of wave ^iii^. The current sell-off was going to be wave *ii* of ^iii^.  As the correction developed we had thought that it ended at 1273.30, which was at our 38.2{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement level of all of our assumed wave ^iii^ rally.

 Today the market spoke and we now know that our wave *i*/*ii* of ^iii^ option appears to be the correct call.

We have updated the Daily Gold chart to show that outcome. Today we dropped a little below our 61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement level, but we believe that wave *ii* is likely now complete. We will see how we trade in the overnight session and if wave *ii* is over at 1252.60, then we will provide our projections for the end for wave *iii* of ^iii^, in our next Post.

One lesson to learn from this, is that wave ^iii^’s are usually the longest and most powerful waves within an impulsive sequence. In this case, our original analysis only had wave ^iii^ being equal in length to wave ^i^. This does not happen very often.


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



Crude fell to 43.59 in early trading but recovered by the end of the day session. Dropping to 43.59 did not change our thinking relative to this market, as we still believe we are at the tail end of wave (b) of iv. Based on that we have updated the EWave count of the current wave iv below:


-a- = 46.77;

-b- = 45.03

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


-a-= 45.96:

-b- = 49.07:

-c- diagonal triangle:

.i. = 46.40;

.ii. = 49.05;

.iii. = 44.35;

.iv. = 46.54;

.v. = 43.59, if complete, to end all of wave .v. and (b).

Upon completion of wave (b) we will see a sharp rally in wave (c) to at least the wave (a) high of 52.10, but likely higher. Assuming that wave (b) ended at 43.59, projections for the end of wave (c) are:

(c) = 51.20, the wave (a) high;

(c) = 1.618(a) = 54.92;

(c) = 2.618(a) = 61.92.

A break of the down trend line connection 49.05 and 46.54, on the intraday chart, would confirm that wave (b) is over at 43.59.

We are long 6 positions, with 44 puts (same as contract month) as “stops”.


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Lots of action in the S&P today. We dropped early to 1989.18, then rallied to 2024.64. We have updated our EWave analysis on the attached 10 Min S&P chart. You can see on the chart, that if the S&P fails to hold the 1988.1990 level, then we should expect a drop of biblical proportions.

St comments:

As we enter goldman sachs sp500 selling season (feb), the captain’s words bear repeating;

 You can see on the chart, that if the S&P fails to hold the 1988.1990 level, then we should expect a drop of biblical proportions.

We will not go into the detailed wave analysis here, as it is shown on the attached chart. What is important is that the drops are impulsive and the rallies are corrective, so we expect that after this last correction completes that the S&P will collapse, as we break through the 1988/1990 level.

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



The USDX rallied as expected, but the extent of the rally has created overlap with ^i^(94.95), with is not allowed in EWaves. Although we believe that we are still in wave .iv., we now have a 3 wave drop from 95.86, within wave *a* as follows:

^a^ = 94.95;

^b^ = 95.32;

^c^ = 93.96, to complete all of wave *a*.

The wave *b* rally continued today, hitting a high of 95.26. We are not sure that wave *b* is complete at that level, but what we are sure about is that on the intraday chart, wave *b* is fully of overlapping waves. Upon completion of wave *b* will drop in wave *c* to likely complete all of wave .iv.

We should point out that wave .iv. could also become a triangle, which would currently look like:

*a* = 93.96;

*b* = 95.26;

Waves *c*, *d* and *e* to go.

Remember our projections for the end of wave .iv. are:

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

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




Although we are still not certain what NG is doing here, the big drop in today’s day session suggested that we heading back to the 1.90 low. We will updated our count for this market this weekend and provide the update in the Monday Morning Post.



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Looks like wave -iv- did not end at 21.13, but at 21.08, as the attached 60 Min Chart indicates. Outside of that nothing has changes, and our previous projection work for the end of wave -v- and (iii) remains changed, as we are looking for a run to 30.00 in the GDX!

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



Captain Ewave Out!