jan 8 am update

Gold:

 

Gold was down slightly during yesterday’s day session but has stabilized and is up a bit in the overnight session at the time of this post. The setback on the intraday charts looks corrective, so we are no really concerned. You have to be impressed with the way is gold is reacting considering the strength in the USDX. Once the USDX tops, gold is going to explode, in the opinion of the Captain. That is what the HUI/GDX crowd is telling us.

We will be adding 2 long positons as 1239.10, and at that time will be also raising our stops to the 1167 level..

We remain long all previous positions, with stops at 1141.70.

Crude:

 

Crude has rallied since hitting the low at 46.85, but the rally has been full of overlapping waves on the intraday chart. Now we know that if wave iii is now over at 46.85 that the wave iv rally will be corrective in nature…which means an overlapping wave structure should be expected. However, we would expect that after being so oversold that crude would signal the end of wave iii with a very large volume up day. This we have not seen, so we are a little skeptical that wave iii ended at 46.85. Based on that we will give this market a few more days to see if we get our sharp rally higher.

S&P:

 

See the updated 10 min S&P chart.

 

The S&P rallied as expected but the rally was larger than we had thought. We still could be in wave –iv- as we are at about the 50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement level of the wave -iii- setback. As you can see on the updated 10 min chart, the rally is corrective as it consist of at least 2 almost complete .a., .b.,.c. patterns. The other option for the S&P is that all of wave (i) ended at 1992.44 and the current rally is almost all of wave (ii). If tis is the case we will be seeing some very big down days in the S&P after wave (ii) completes.

We remain short 2 positions, and do not plan to take profits until we reach the end of wave -v-.

USDX:

 

The USDX continued higher in the overnight session, reaching a high of 92.53. Still not sign of a top here. Once this market tops, watch for gold to rally start to rally!

 

NG:

 

Nothing more to add to this market.

We are still long 4 positions, risking to 2.81.

HUI/GDX:

 

See the updated 60 min GDX chart.

The short term picture on the GDX looks a little uncertain. From our wave ^iii high of 20.69 we fell to what looks like wave ^iv^ to 19.82 and then we rallied as expected, in wave ^v^, but we failed to rally above the wave ^iii^ high of 20.69, only hitting 20.67. You have heard us many times talk about issues around undertaking EWave analysis using failed wave patterns. In this case wave ^v^ failed to exceed wave ^iii^.

What we are not sure about then is whether wave ^iv^ is complete at the 19.82 low, or whether something more complex is happening. For the time being the 60 min chart shows what would happen if wave ^v^ ended at 20.67.

 

We have updated the count below, to make the 60 min GDX chart, but advise caution on the end of wave ^iv^:

(i) = 18.91;

(ii) = 17.16;

(iii):

-i- = 18.48;

-ii- = 18.76

-iii-:

.i. = 18.71;

.ii.:

*a* = 18.05:

*b* = 18.60;

*c* = 17.95, to complete all of wave *ii*:

.iii.:

*i* = 18.80;

*ii* = 18.40. Note that 50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement is 18.38:

*iii*:

^i^ = 19.26;

^ii^ = 18.76;

^iii^ = 20.69:

^iv^ = 19.82, if complete;

^v^ = 20.67, if complete to end all of wave *iii*;

*iv* is now.

Thanks