Elliot C Wave Blast-Off!

Gold

Gold traded to a high of 1191.00 in today’s day session, which is above last Friday’s high.

On the Intraday Chart the trading from Friday’s high of 1187.20 does not look impulsive which keeps all of our current options open.  

Short term wave count:

.i. = 1158.40;

.ii. = 1144.90;

.iii. = 1177.00;

.iv. triangle = 1168.50;

.v.  = 1187.20, if complete, to complete wave -i-.

It’s possible that wave .v. is subdividing and is not complete at the 1187.20 high. It is also possible that this sideway trading is part of our wave -ii- correction.

If wave -i- ended at 1187.20 then we should be expecting a 50 to 61.8% retracement of the wave -i- rally, which would be 1164.65 and 1159.30, respectively.

As a minimum, we should trade below 1179.70, to end either wave -ii- or an extended wave .ii. of -v-. Wave .i. would have ended at Friday’s high of 1187.20.

Note that a test of the red down trend line is likely….

Long term chart:

We believe gold can rise to at least $1307, and more likely to $1425, just as this C wave advance really gets underway!

We are long 13 COMEX long positions, risking to $1142!

Crude

Crude was higher in today’s day session reaching 47.60, at the time that this Post was being written.

We also traded above the double top at 47.30/47.40. Evidence is building very nicely that we are well underway in our expected wave (c) of iv rally.

Based on today’s trading we are sticking with our current thinking for how wave (c) is developing, as follows:

-i- = 47.47;

-ii- = 44.83;

-iii-:

.i. = 47.33;

.ii. = 45.34. Note that the 78.6% retracement of wave .i. = 45.37!

.iii. rally is now.

Projections for the end of wave .iii. are:

.iii. = 1.618.i. = 49.39;

.iii. = 2.618.i. = 51.89.

Some projections for the end of wave -iii-:

-iii- = 1.618-i- = 50.40;

-iii- = 2.618-i- = 53.85.

We have raised out stop to 44.76

We are long 8 positions risking to 44.76.                                    

S&P500: 120 Min S&P500 Chart:

The S&P500 was very stable today. As you can see on the attached 120 Min S&P Chart, we still need to at least trade to the wave -iii- high of 2119.59, to satisfy the minimum conditions for a completed ending diagonal triangle.

We will probably start probing the short side on a trade above the 2119.59 high.

USDX: Daily chart

It appears that our low of 94.88 was correct as the futures market did experience liquidity problems, which probably created the difference between the cash and future markets.

We use the cash market, so we will be basing our analysis on the 94.88 low.

In today’s day session the USDX reached a low of 97.07 at the time that this post was being written.

It is not clear whether this is the end of wave .c. of our wave -iv- triangle, or whether we have further to fall. We can drop all the way down to the wave .a. low of 94.88, before our triangle formation would need to be eliminated. We updated the current progress of our wave -iv- triangle, based on today’s trading below:

.a..b.= 99.76;

.c. = 97.07, if complete;

Waves .d. and .e. to go to complete all of wave iv- triangle.

Upon completion of wave -iv we need to rally one more time in wave -v- to at least the wave -iii- high of 101.71. A break now of 94.88, would suggest something different is happening.

NG

NG dropped a little below 2.72 in today’s day session. We have satisfied the minimum requirements for a completed wave .d., so we cannot rule the possibility that our wave .e. rally has now begun.

We do have a projection for the end of wave ^c^ at 2.66. For our triangle formation to remain valid we cannot trade below the wave .b. low of 2.64. Upon completion of wave .d., we should rally one more time in wave .e. to complete the entire wave -v- triangle.  And then….boom, boom, out go the lights!

HUI/GDX

The HUI/GDX continued higher with gold today.

We are long the GDX, risking to 17.29.

Here’s a look at junior gold sector bellwether Claude Resources:

Here’s a look at industry bellwether Barrick:

While gold could pull back to the $1159 - $1165 area, Barrick seems poised to stage an upside Wave C breakout anyways!

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