jan 4 morning post!

Gold: 

 

Daily Gold Chart:

https://captainewave.com/wp-content/uploads/2019/01/ewjan419gold.png

Short Term Update:

 

Gold was higher in yesterday’s day session and that trend continued early in the overnight session as we briefly crossed the 1300.00 level reaching a high of 1300.40. Since that high was reached gold has moved lower.

 

That drop lower continued after the release of the December US Employment Report as we have reached a current low of 1287.00.

   

Within wave .iii. we continue to work on our first impulsive sequence, as shown on the Daily Gold Chart. Within that first impulsive sequence, it could now be possible that all of wave $iii$ is complete at the overnight high of 1300.40. If that is the case then we should now expect a wave $iv$ correction that retraces between 23.6 to 38.2{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} of the entire wave $iii$ rally. Those retracement levels are:

 

23.6{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 1275.90;

38.2{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 1260.80

 

We did reach our first projection for the end of wave $iii$ in the overnight session at the 1300.40 high, with our projection being:

 

!iii!=1.618!i!=1296.40.

 

There is still an outside chance that only wave ?iii? ended at the 1300.40 high as the projection for its end is:

 

?iii? = 2.618?i? = 1300.30.

 

If that is the case then we are now correcting in wave ?iv?, which has the following retracement levels:

 

23.6{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 1279.20;

38.2{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 1266.10

 

Once the USDX finally starts to accelerate lower in its initial phase of its wave (iii) drop, gold and silver are expected to move sharply higher also.

 

Longer term our first projection for the end of wave .iii. is:

 

.iii. = 1.618.i. = 1447.20.

 

We do have higher projections. Of course, wave .iii. will subdivide into a 5 wave impulsive sequence in its journey higher.

 

Trading Recommendation: Long gold. Use puts as stops.

 

Active Positions: We are long, with puts as stops!

 

Silver:

 

Daily Silver Chart:

https://captainewave.com/wp-content/uploads/2019/01/ewjan419si.png Short Term Update:

 

Silver was higher in yesterday’s day session and that trend continued early in the overnight session as we reached a high of 15.93. After the high was made silver moved lower.

 

The drop lower continued after the release of the December US Employment Report as we reached a low of 15.72.

 

We have updated our Daily Silver Chart to show the first count within wave .i.. It looks like all of wave ^iii^ of .i. could now be complete at the overnight high of 15.93. If that is the case then we should now expect a wave ^iv^ correction that retraces between 23.6 to 38.2{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} of the entire wave ^iii^ rally. Those retracement levels are:

 

23.6{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 15.49;

38.2{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 15.21. 

 

We cannot rule the possibility that wave ^iii^ is going to extend and in that case we should be heading to our second projected endpoint of:

 

^iii^ = 2.618^i^ = 16.94.

 

Trading Recommendation: Long silver. Use a put as a stop.

 

Active Positions: We are long, with puts as stops!

 

Crude Oil:

 

Daily Crude Chart:

https://captainewave.com/wp-content/uploads/2019/01/ewjan419oil.png

 

Short Term Update:

 

Crude traded sideways to lower in yesterday’s day session, but in the overnight session we moved higher to reach a high of 48.41.

 

All of wave a is complete at the 76.70 high and we are now falling in wave b that is heading back or even below the 26.05 low. If the current 3 wave pattern is an abc, then we are now falling in a wave x, which will not likely fall back to the 26.05 low. This count will be our alternate.

 

We are now working on the assumption that all of wave (a) is now complete at the 42.21 low and that our expected wave (b) rally is now underway. Our retracement level for wave (b) are:

 

50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 59.41;

61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 63.52.

 

In the short term we are still expecting crude to continue higher, although it is too early to determine which type of corrective pattern wave (b) is going develop into, but as a minimum it will need to be at least one 3 wave pattern. Since we are rallying in a wave (b), we should expect this rally to be choppy and full of an overlapping wave structure.

 

Suncor: Suncor was higher in yesterday’s trading session, as we are now waiting for confirmation that all of wave (i) is complete at the 25.81 low. If that is the case then we should now expect a wave (ii) rally that retraces between 50 to 61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} of the entire wave (i) drop. Those retracement levels are:

 

50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 34.04;

61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 35.98.

 

Trading Recommendation: Long with put at 57.00 as a stop.

 

Active Positions: Long with put at 57.00 as a stop.                                    

 

US 10 Year Bond Yield:

 

Daily US 10 Year Bond Yield Chart:

https://captainewave.com/wp-content/uploads/2019/01/ewjan419bond.png

Short Term Update:

 

The US 10 Year Bond Yield was sharply lower in yesterday’s day session as we reached a low of 2.554{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1}. After the release of the December US Employment Report we moved higher to reach a high of 2.648{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1}.      

 

We continue fall in wave (ii). We expect wave (ii) to retrace between 50 to 61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} of the entire wave (i) rally. Those retracement levels are:

 

50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 2.641{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1}

61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 2.498{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1}

 

We have shown on the Daily US 10 Year Bond Yield Chart our first suggested count for the internal wave structure of wave (ii). It looks like wave $iii$ of *a* could now be complete at the 2.554{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} low. If wave *iii* is now complete, then we should expect a small corrective rally in wave *iv* to be the next big event in this market. We note that other options are also still possible for the internal makeup of wave (ii).

 

We have taken profits on our short positions.

 

Trading Recommendation: Take nice profits on short positions. Go Flat now.

 

Active Positions: Taking profits. Flat now!

 

S&P500: 

 

Daily SP500 Chart:

https://captainewave.com/wp-content/uploads/2019/01/ewjan419sp120.png

120 Minute SP500 Chart:

https://captainewave.com/wp-content/uploads/2019/01/ewjan419spd.png

Short Term Update:

 

The SP500 was sharply lower in yesterday trading session reaching a low of 2443.96. In the overnight session the SP500 Futures are up about 32 points.

 

We are continue to drop in sharply in wave (iii), which has an initial projection for its completion of

 

(iii) = 1.618(i) = 2256.01.

 

Within wave (iii), we are believe are still rallying in an incomplete wave .iv. as shown on the 120 Min SP500 Chart.   

 

Within wave .iv., it now looks like we now have a five wave impulsive sequence within wave *a* to the current high of 2520.27. Wave *a* is likely complete at the 2520.27 high and in that case we have started to fall in wave *b*.

 

Wave *b* is expected to retrace between 50 to 61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} of the entire wave *a* rally, as shown on the 120 Min SP500 Chart. We are still a bit short of our 50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement level for all of wave *b*, which is around the 2433 level, so we are thinking that it is still not complete at the 2443.96 level. After wave *b* ends we should see one more rally in wave *c*, back to the wave *a* high to complete all of wave .iv..

 

Our last retracement level for all of wave .iv. as:

 

50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1}= 2516.01.

 

Since our wave .iv. retracement has reached the 50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} level, we need to be our guard for another very bearish alternate count that is suggesting that wave .iii. is now subdividing. In this case wave *i* of .iii. ended at the 2346.58 low and we are now rallying in our wave *ii* correction. Also wave *ii* should retrace between 50 to 61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} of the entire wave *i* drop. After wave *ii* ends we should expect a huge drop in the SP500 in wave *iii*…. likely a record single day drop.

 

There is an outside chance that all of wave .iv. is complete at the 2520.27 high and if that is the case then we are now heading sharply lower again in wave .v..

 

This market now has several options that all end badly for the bulls.

 

Trading Recommendation: Stay short with a call option as a stop.

 

Active Positions: Very Short with an updated call as a stop.

 

USDX:

 

Daily USDX Chart:

https://captainewave.com/wp-content/uploads/2019/01/ewjan419usd.png

Short Term Update:

 

The USDX was lower in yesterday’s day session and that trend lower continued in the overnight session until the release of the December US Employment Report. The USDX did reach a low of 95.68, after which we moved higher to reach a high of 96.11.  

 

We still believe that wave (iii) lower is now underway, with our first projection for its completion being:

 

(iii) = 1.618(i) = 72.37

 

In the short term a run back to the 96.65 high could still occur before we start to really accelerate lower. A drop now below the 95.68 low will seal the fate of the USDX to the downside. This expected breakdown in the USDX will send gold and silver sharply higher.

 

Trading Recommendation: Short, risking to 98.55.

 

Active Positions: Short, risking to 98.55.

 

NatGas: 

 

Daily NG Chart:

https://captainewave.com/wp-content/uploads/2019/01/ewjan419usd.png

Short Term Update:

 

NG was marginally lower in yesterday’s day session as we reached a low of 2.872. In the overnight session we have moved sideways to currently be trading at the 2.990 level.

 

The big drop in NG has eliminated our current short term count, and at the moment we do not have anything new to offer, although we could we working on a wave b bearish triangle. More details coming.

 

Trading Recommendation: Flat.

 

Active Positions: Flat.

 

GDX & Gold Stocks:

 

GDX 60 Min Chart:

https://captainewave.com/wp-content/uploads/2019/01/ewjan419gdx60.png

GDX Daily Chart:

https://captainewave.com/wp-content/uploads/2019/01/ewjan419gdxd.png

Short Term Update:

 

The GDX was higher in yesterday’s trading session, as we reached a high of 21.54. The short term count for this market is looking a bit clouded at the moment, and we might need to make a slight adjustment, depending on how we trade today.

 

We are now rallying in a subdividing wave -iii-, and within that wave, we should be rallying sharply in wave ^iii^. We expect higher prices ahead as our next target will be to break and cleanly close above the wave ^i^ high of 21.47.

 

Our first projection for the end of wave -iii- is:

 

-iii- = 1.618-i- = 23.49.

 

Longer term our first projection for the end of wave 3 is:

 

3 = 1.618(1) = 48.95.

 

We have updated all of the following counts, for the following:

 

Kinross: Has now completed its minimum requirements for a completed wave (ii), at the 2.38 low. Wave  (iii) rally is now underway.

 

Barrick:  We have completed the minimum requirements for a completed wave (ii) at the 9.53 low. Wave (iii) rally is now underway.

 

HUI: We have completed the minimum requirements for a completed wave (ii), at the 131.12 low. Wave (iii) rally is now underway.

 

XAU: We have completed the minimum requirements for a completed wave 2 at the 60.59 low. Wave 3 rally is now underway.

 

Trading Recommendation: We continue to suggest buying all of the above gold stocks and indices, for a long term hold.

 

Active Positions: We are long the GDX, ABX, KGC, NEM, SSR, and TSX:XGD with no stops!!

 

Note: The Captain will be in Minneapolis, Minnesota from January 07th to the 9th. No posts during this time, although the Captain will be watching the markets and provide any Intraday Posts for breaking markets, as required.