Metals & Stock Market Update

S&P500: 

Wave v is complete at the 4748.87 high as a failure high. We have now started a multi-decade correction. We will assume that the first drop in this correction will be five (5) waves and so far, wave (i) ended at the 4222.62 and all of wave (ii) at the 4637.30 high.

We are now falling in wave (iii), that appears to be subdividing with wave -i- of (iii) ending at 3858.87 and all of wave -ii- at the 4325.28 high. We are now falling in wave -iii-, which has an initial projected endpoint of:

-iii- = 1.618-i- = 3065.78.

On the Intraday Chart it looks like within wave -iii-, wave .i. ended at 3491.58, all of wave .ii. looks to still be underway. We have updated our internal wave count for wave .ii. to suggest that it has become a double 3 wave correction, that is getting very close to completion. Our last retracement level for all of wave .ii. is:

78.6% = 4146.87.

We have now exceeded our 78.6% retracement level so we must continue to move lower in the start of wave .iii. We will provide our updated projected endpoint for all of wave .iii., when we believe that all of wave .ii. is complete.

Currently, we do not have an alternate count for the SP500.

Our current projected endpoint for all of wave (iii) is:

(iii) = 2.618(i) = 3259.58.

Trading Recommendation: Go short with calls as stops.

Active Positions: Very short with calls as stops!

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Ten Year Bonds Yields:

All of wave (iii) is complete at the 4.333% high and we are now falling in wave (iv), which has the following retracement levels:

23.6% = 3.426%;

38.2% = 2.870%.

We are now working on the assumption that (iv) has become more complex and is NOT complete at the 3.334% low. We think that wave -b- has become more complex and it may now be complete at the 3.923% high. Our retracement levels for all of wave -b- are:

50% = 3.865%;

61.8% = 3.977%

We have now entered our retracement zone, so we need to be on guard for the completion of wave -b- and the start on another drop in wave -c-. If wave -b- ended at the 3.966% level, then our projections for the end of wave -c are:

-c- = -a- = 3.035%;

-c- = 1.618-a- = 2.456%.

Trading Recommendation: Flat. 

Active Positions: Flat!

Gold:

Wave *c* of our very large wave .iv. bullish triangle ended at 1614.90 (XAU). From that low we continue to rally in wave *d*, which now appears to have become a double 3 wave rally, as shown on our Daily Gold Chart.

From the wave *c* low of 1614.90 our first 3 wave pattern ran to 1786.70, and that was followed by a wave ^x^ bullish triangle that ended at 1785.10. Within our second 3 wave rally, wave ^a^ ended at 1949.30 and we are now falling in our second wave ^b^ which has a last retracement level of:

78.6% = 1820.20.

We now reached our 78.6% retracement level, so for our current analysis to remain valid we do not want to trade much below the 1819.00 level. On the Intraday Chart it looks like we are falling in an incomplete ending diagonal triangle formation. The internal waves of that triangle formation are:

$i$ = 1861.40;

$ii$ = 1889.70;

$iii$ = 1830.80;

$iv$ = 1845.30;

$v$ = 1819.00, if complete.

We are now working on the assumption that all our diagonal triangle formation is complete at the 1819.00 low, which completes waves $v$ and our second wave ^b^. We should now be starting to rally higher in our second wave ^c^. This next rally in our second wave ^c^ will likely complete all of wave *d*.

In the bigger picture, our wave *d* rally that cannot trade above our wave *b* high of 2089.20, and then after wave *d* ends we expect another drop in wave *e*, which cannot trade below the wave *c* of 1614.90. We have shown this graphically in our Daily Gold Chart. 

Trading Recommendation: Go Long gold. Use puts as stops.

Active Positions: Long gold, with puts as stops! 

CDNX:

We have broken above the 625.99 high, which has eliminated our ending diagonal triangle formation for wave $v$. This suggests that all of wave -ii- is complete at the 555.25 low, although we are currently not sure what our internal count for wave $v$ of (c) of -ii- looks like. We will need to take another look at what is going on.

In the meantime, we are continuing to work on the assumption that all of wave -ii- is complete at the 555.25 low and that we have started to rally sharply higher in wave -iii-.  

We are once again challenging major resistance at the 625.99 level.

Trading Recommendation: Go Long the GDXJ as a long-term hold. 

Active Positions: Heavily long the GDXJ and key juniors on the CDNX, as a long-term hold!

Free Offer For Gold-Eagle Readers:  Please send me an Email to [email protected] and I’ll send you our free “GDX: Is This The Low?” report. As a bonus, I also include 2 hot junior miners that we are buying for our Ewave Juniors Portfolio!

Thank-you!

Captain Ewave & Crew

Email: [email protected]

Website: www.captainewave.com

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