Technical Analysis Of Major Market Updates

GOLD

Gold was marginally lower in the overnight session, reaching 1179.30 at the time that this Post was being written.

On the intraday chart it is now looking like we are about to complete a five wave drop from 1205.05 to the current low.

This means that our wave .x is going to subdivide and that our current wave -d- looks like:

.a. = 1191.80;

.b. triangle = 1183.10;

.c. = 1205.70;

.x.:

^a^ = 1179.30 area, if complete;

^b^ rally is next, which should rally between 50 to 61.8% of the wave ^a^ drop;

^c^ drop to at least the wave ^a^ low to complete all of wave .x. 

Upon completion of wave .x., we should expect another .a., .b., .c. rally, to complete all of wave -d-.

No change to our current 17 long positions, risking to 1141.50.

CRUDE OIL

We mentioned in our last End of Day Post that it might be possible that wave ^e^ in our wave *iv* triangle is also becoming a triangle.

On the attached Daily Chart you can see what that formation would look like.

On a short term basis, the formation would look like (assumes wave ^d^ ended at 61.81):

!a! = 59.25;

!b! = 60.63;

!c! = 59.27;

!d! = 60.39;

!e! drop cannot drop below the wave !c! low of 59.27. This would complete all of wave ^e^ and our wave *iv* triangle.

The next big event would be a wave *v* thrust that we have a minimum target of our wave *iii* high of 62.58. 

Although we still prefer the Option that we are still in wave ^c^ of the wave *iv* triangle, we think there is a low risk opportunity trade here. We will go long 10 at 59.70, risking to 59.26.

We just went long 10 crude futures contracts at 59.70, risking to 59.26!                                                                                       

S&P500

We are expecting at least one more push in the S&P to at least 2134.72 minimum target, and possibly to our projected target of 2041.87, to complete all of wave .c. and -v-.

We are now in wave *v* of .c.

We have moved our Suncor position to the SP500 section from the Crude Oil section, because it is working as a general indicator of what could happen to the S&P500 soon. 

We will be adding to our short Suncor position at 26.00, and will then lower our stop.

We are short Suncor, risking to 33.50.

We are short 3 SP500 positions at 2115, with 2125 calls, and will add 5 more short positions at 2070.00.

NATGAS

NG moved higher in the overnight session, reaching 2.82 at the time that this Post was being written.

We are working on the assumption that all of wave ^b^ ended at 2.74, and that we have started our wave ^c^ of .c. rally higher.

On the Intraday Chart the rally from the 2.74 is looking impulsive which supportS our idea that wave ^b^ ended at our second visit to 2.74.

Assuming that wave ^b^ ended at 2.74, our projections for the end of wave ^c^ are:

^c^ = 0.618^a^ = 2.96;

^c^ =^a^ = 3.10.

Our updated wave -iv- triangle would look like(note we have revised the end of wave ^a^ to 2.92, from 2.95):

.a. = 3.11;

.b. = 2.56.

.c.:

^a^ = 2.92;

^b^ = 2.74;

^c^ rally is now to at least the 2.92 wave ^a^ high to complete all of wave .c.

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

EURO

The euro has built a sizable inverse head and shoulders bottom pattern.  That’s bullish, and could serve as the “launching pad” to launch the euro into its C/3 wave.

A move above the neckline area could usher in a big rally in gold and GDX!

HUI/GDX

This triangle action is starting to wear us down, as do most triangles!!

Triangles tend to expand, and that creates frustration for investors, as the “big move” keeps getting delayed.

We are not sure whether wave (c) is complete at the 18.23 low. We needed to turn higher at the opening today, for our current analysis for the end of wave (c) to remain valid.

If wave (c) ended at 18.23, then within wave (d) we have the following:

-a- = 19.18;

-b-= 18.32, if complete;

-c- rally to go.

Once we are sure that wave -b- is complete we will then provide our projections for the end of wave -c-.

The good news is that GDX did hold the $18.23 low after opening this morning.  The low so far today is $18.25, keeping our scenario intact.

We are long GDX, risking all positions to 17.28!

NEWMONT (NEM-N)

Note the eerie symmetry between the inverse H&S pattern on the euro, and the pattern on Newmont!  A move above $28 would take Newmont above the neckline of its bottom pattern.

August is the likely timeframe for a breakout, based upon the action occurring in gold and the expanded GDX triangle pattern.

Newmont is a key holding in the GDX ETF, and a C wave advance in NEM would be great news for the entire gold stocks sector!

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