jan 8 morning post!

CAPTAIN EWAVE MORNING POST!

 

Gold:

 

Short Term Update:

 

Gold reached a high of 1112.20, in the overnight session, and then pulled back to a low of 1092.30, at the time that this Post was being written. The drop to 1092.30 was likely the test of the breakout of the previous high at 1097.40. It’s the old resistance becomes support stuff, and vice versa.

 

Since we believe we are working on at least wave ^iii^ of *c* of .b., we need to watch the 1112.20 area as that might signify the end of wave ^iii^. Our projections for the end of wave ^iii^ are:

 

^iii^ = 1.618^i^ = 1113.50. Our preferred;

^iii^ = 2.618^i^ = 1148.10.

 

We cannot rule the possibility that wave ^iii^ will extend and move to our second projected area of 1148.10. If wave ^iii^ has ended at 1112.20 then the next big event in gold will be a wave ^iv^ correction, which is expected to retrace between 23.6 to 38.2{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} of the entire wave ^iii^ rally.

 

Projections of the end of wave *c* are:

 

*c* =1.618*a* = 1116.20. Our preferred;

*c* = 2.618*a* = 1159.10  

 

Our current count for wave .b. is as follows:

 

*a* = 1088.30;

*b* = 1046.80;

*c*:

^i^ = 1081.40;

^ii^ = 1057.50;

^iii^ = 1112.20, if complete;

^iv^ correction is next.

 

Longer Term Update:

 

Our current retracement level for wave .b is:

 

50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 1118.60;

61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 1135.80.

 

Wave .b. is expected to consist of at least one *a*, *b*, *c* pattern.

 

There is an outside chance that all of wave 4 or wave ii of 3 is complete at the 1045.40 low also. A break above the upper red down trend line connecting waves -ii- and -iv-, as shown on the attached Daily Gold Chart would confirm that wave 4 or wave ii of 3 ended at 1045.40.

 

This idea is gaining some traction with us as a few gold stocks are breaking major multi-year downtrend lines which would not support the idea that gold is going lower!!

 

Active Trading Positions: Long 20 positions, with puts at 1085.00!

 

Crude:

 

Short Term Update:

 

In yesterday’s End of Day Post we provided a somewhat different EWave analysis for the long and short term direction of crude. In this revised count, we are now suggesting that a major low is crude is developing at the current levels.

 

The current low of 32.10 would be wave b of B, and that we should now be starting a major move higher in wave c of B, that will take us back to the 147.27 higher.

 

A key element of success of the analysis will be break of the upper red trend line connecting 62.58 and 50.92. This trend line is clearly shown on the Daily Crude Chart, which we attached in yesterday’s End of Day Post.

 

In the short term will need to see an impulsive wave sequence start to develop out of the 32.10 low, as a first set.    

 

In the overnight session crude dropped to 33.15, and on the Intraday Chart we do see a 3 wave correction from 34.25 to the overnight low of 33.15. Let’s see if this develops in the impulsive sequence that we are looking for.

 

We do NOT have an indication that the 32.10 low is the end of wave b, at the moment.

 

Long Term Update:

 

We will talk more about this chart in the days ahead.

 

Active Trading Positions: Long 15 positions, with 42.00 puts, as stops, plus long 5 positions with 37.00 puts, as stops!

 

S&P: 

 

Short Term Update:

 

EWave analysis aside this market is due for at least a relief rally. The S&P Futures are up about 20 points at the time that this Post was being written.

 

We will take a more detailed look at this market and provide our updated analysis in the End of Week Post. The S&P was crushed again yesterday.

 

We still do not have a valid alternate short term count to share with our Subscribers, at this time, but we are still looking at this drop to be part of a complex wave -iv-.  

 

We need to repeat this very important statement: “On the 120 Min Chart (not attached), the wave patterns from our assumed wave -iii- high of 2116.48 are full of overlapping waves, which suggests this drop is corrective and when complete we should rally at least back to the 2116.48 high.” 

 

Long Term Update:

 

Likely ending all of most of wave -iv-, with wave -v- higher to begin upon the completion of wave -iv-. On the longer term chart we could also be looking at a very large bullish triangle that would have started at the 1975.88 high. More in the End of Week Post.

 

Active Trading Positions: None!!

 

USDX:

 

Short Term Update:

 

The USDX reached a high of 99.26, in the overnight session, at the time that this Post was being written.

 

We suspect that this rally is all or part of a correction of the drop from 99.73 to 98.24. We still believe that wave *b* ended at 99.73 and that we are now dropping in wave *c*. Our minimum target for this drop is the wave *a* low of 97.59. Our count for wave *c* would be:

 

!i! = 98.24;

!ii! = 99.26;

!iii! should be starting now.

 

Long Term Trading Update:

 

Our updated current count for wave .iv. is:

 

*a* = 97.59;

*b* = 99.73;

*c* should now be underway, with a target of at least the 97.59 wave *a* low.

 

Our current count for all of wave -v- is:

 

.i. = 96.64;

.ii. = 93.83;

.iii. = 100.58;

.iv. is still underway;

.v. rally to go to at least the 100.71, wave -iii- high.

 

This is becoming very important: We are also watching our alternate count, and need to see a drop below the 96.64 high for this alternate to become active.

 

Active Trading Positions: Short 5 positions at 99.45, risking to 99.75!

 

NG:

 

Short Term Update:

 

Our wave *iv* of –a- triangle formation ended yesterday, and we are now thrusting higher in wave *v*. The high of this thrust is 2.425.

 

We have satisfied the minimum requirements for a completed wave *v*, as we have traded above the wave *ii* high of 2.385, but on the Intraday Chart, we do not see a completed impulsive wave sequence within wave *v* at the current high of 2.425. This would suggest that this thrust still is moving higher. Upon completion of wave *v* and –a-, we are expecting a drop in wave -b-.  

 

The Wave -b- will consist of at least one *a*, *b*, *c* pattern, and should retrace between 50 to 61.8{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} of the entire wave -a- rally.

 

We will provide the retracement zone for the end of wave -b-, once we are sure that wave -a- is complete.

 

Long Term Trading Update:

 

Our retracement levels for all of wave (iv):

 

38.2{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 2.91;

50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} = 3.29.

 

For the time being we will assume that wave (iv) is a simple -a-, -b-, -c- pattern, and within that count we have :

 

-a- is still underway;

-b- drop is next;

-c- rally to at least the wave -a- high, but more likely to our 38.2{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1}/50{6662cb326f536db879050e93fbe8de36d93608a2a48b01f600643f4328fc39a1} retracement zone shown above.

 

Active Trading Positions: Plan to buy again, when we drop into our yet to determined wave -b- retracement levels!

 

HUI/GDX and Selected Gold Stocks:

 

Short Term Update:

 

Trading in this market and related gold stocks will be dictated by whether gold has completed wave ^iii^ at the 1112.20 high, If so then we should expect weakness as gold works on its wave ^iv^ correction.

 

If wave ^iii^ in gold is extending then we should expect an acceleration in prices to the upside in this market and related gold stocks.

 

We did provide detailed analysis of ABX, Kinross and CRJ, in yesterday’s End of Day Post, and these stock do support a possible correction of their recent moves higher..

 

Long Term Update:

 

It looks like wave B ended at 12.62, and we have started wave C higher. Within the initial stages of wave C, we have the following count:

 

-i- = 17.04;

-ii- = 12.92;

-iii-:

.i. = 13.95;

.ii. = 13.19;

.iii.:

*i* = 14.29;

*ii* = 13.57;

*iii* is now underway.

 

We need to see a break of 15.61, to confirm our current count for this market....wave B ending at 12.62.

 

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