JAN 8 EOD UPDATE

Gold:

 

Gold continues to trade sideways. We need the USDX to top out to get this market moving rapidly higher.

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 did not really accomplish today. The concerns we raised in this morning's post remain valid and are repeated here.

"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 sharply today eliminating any doubt this this rally is a wave (ii), and not a wave -iv-. We have updated the 10 min S&P chart accordingly. Wave (i) ended at 1992.44. The wave (ii) rally appears to consist of two -a-, -b-, -c- patterns. Note the relationships between waves -c- and -a-, as shown on the 10 min chart. It looks like we need one more push in the S&P to complete a wave -c- diagonal triangle. We are also very close to the 78.6{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement of the entire wave (i) drop.

For this analysis to remain valid we would not want the S&P to rally very much above the 78.6{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} value of 2072.00.

We remain short 2 positions, risking to 2093.60.

USDX:

 

The USDX fell in today's day session, from the overnight high of 92.53, hitting a low of 92.12, before rallying again. The drop from 92.52 to 92.12 was not impulsive looking on the intraday chart, so we expect that the 92.53 high will be exceeded in the near future.

 

NG:

 

Nothing more to add to this market, although we were up today. Only a break of the down trend line connecting 4.53 and 3.94, would finally suggest that wave ii is complete at 2.81.

We are still long 4 positions, risking to 2.81.

HUI/GDX:

 

See the updated 60 min GDX chart.

As we suspected, our concern about the short term wave structure, based on the "fail" option, proved to be 100{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} correct. See the updated 60 min GDX chart, for our current thought process. It appears that wave ^iii^ ended at 20.69, and now wave ^iv^ is either over or mostly over at 19.61. Wave ^iv^ included a triangle pattern. Upon completion of wave ^iv^ we should rally in wave ^v^ to at least the wave ^iii^ high of 2.69, to complete all of wave *iii* also.

 

We have updated the count below, to match the 60 min GDX chart;

(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^ = 19.61, if complete;

^v^ rally to go to at least the wave ^iii^ high of 20.69.

Thanks