Technical Analysis Of Major Markets

Gold

We had mentioned in both of yesterday’s Posts, that we did not see an impulsive wave structure on the Intraday Chart in the rally from the 1073.00 low to 1097ish high.

That suggested to us, unfortunately, that the 1073.0 low is going to be revisited again.

In the overnight session, gold reached a low of 1076.40, at the time that this Post was being written. The drop from the 1097ish area to the current low looks like an incomplete impulsive drop. This also suggests that gold is heading back to the 1073.00 low.

If we trade below the 1072.30, Daily Continuous Futures low, our current preferred analysis will be eliminated and our current alternate will become our preferred.

That current alternate suggests that gold is working on wave -v- of our second wave (c) of 4. Our second wave (c) is an ending diagonal triangle. 

We are long 20 positions, with puts at 1085.00!

Crude

We saw a couple of very positive signs for the bulls in yesterday’s crude trading session. The rally from 40.06 to 42.25 looks to be impulsive on the Intraday Chart and we had a key daily reversal higher on the Daily Chart.

We continue to believe that all of wave *ii* is complete at the 40.06 low, although we still not have been able to identify the wave structure within that wave *ii* correction.

A drop now below the 40.06 low would suggest that crude is heading back to the 37.75 low. 

In the overnight session, crude reached a low of 41.13, at the time that this Post was being written. On the Intraday Chart the drop from 42.25 to the current low of 41.13 looks corrective, which supports higher prices, after this correction ends.

Although it is a bit early to start with the labelling, it seems reasonable to assume that the corrective rally should retrace between 50 to 61.8% of the previous impulsive move. Those levels are:

50% = 41.15;

61.8% = 40.90. 

We are now at roughly the 50% retracement level.

We are long 15 positions, with 42.00 puts, as stops!                                                                     

S&P500

We are working on the assumption that the current rally is wave .iv., within our first impulsive sequence from the wave (ii) high of 2116.48.

We believe that all or most of wave .iv. is complete at yesterday’s high of 2053.22, which is 50% retracement of the entire wave .iii. drop. Our other option is that wave .iii. is subdividing and currently looks like:

^i^ = 2019.39;

^ii^ = 2053.22, if complete;

^iii^ drop is next.

Our current preferred count for wave (iii) is as follows:

-i- :

.i. = 2068.24;

.ii. = 2086.94;

.iii. = 2019.39;

.iv. = 2053.22, if complete;

.v. drop to go to complete all of wave –i- of (iii).

We will take profits on our short positions at the end of wave -i- and short again at the end of the wave -ii- rally.

We cannot rule the possibility that wave .iii. will extend and reach our .iii. = 2.618.i. projection which is 1960.35.

In the bigger picture our first projection for the end of wave (iii) is, (iii)=1.618(i) = 1686.51. Since wave (ii) was so deep the end of wave (ii) will likely reach the (iii)=2.618(i) projection which is 1420.44.

We are short 5 positions, risking to 2087.00!

USDX

The USDX reached 99.78, in the overnight session, at the time that this Post was being written.

We have adopted the idea that wave -iv- ended at 92.54 and the current rally is wave -v-, which is now heading to at least the wave -iii- high of 100.71. The current count for wave -v- looks like:

.i. = 96.64

.ii. = 93.83

.iii. rally is now. Our .iii.=1.618.i. projection is 100.50.

NatGas

NG drooped to a low of 2.290, at the time that this Post was being written, in the overnight session. A drop back to the 1.95 low, appears likely now, as we have failed to close above the upper trend line of our ending diagonal a triangle. It looks like wave (iii) is still underway.

We are flat, with no positions! 

HUI/GDX:

It is now very unlikely that the 13.29 low is the end of wave -ii- and we now expect that the GDX will drop below its current assumed wave B low of 12.62.

The HUI and XAU remain within their respective ending diagonal triangles and we will post those updated charts in our End of Day Post today! 

Our current, but unlikely to remain correct count, is :

-i-:

.i. = 14.71;

.ii. = 13.19;

.iii. = 15.83;

.iv. triangle = 15.73

.v. = 17.04, to complete all of wave -i-;

-ii-:

.a. = 15.61

.b. = 16.81

.c. = 13.29, if complete to complete all of wave -ii-.

-iii- rally is next.    

KINROSS

Kinross continues to trade within the basing channel, and the breakout to begin our C wave higher remains elusive, but the bullish implications are unchanged.

CLAUDE RESOURCES

Claude continues to “plod” higher, in the up channel, towards our 98 cent target.  It’s our bell weather gold stock, and it continues to outperform the sector.  All light pullbacks, including this one, can be bought by investors.

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

CHINA STOCK MARKET (FXI)

Like the US stock market, China is rallying, but it’s a bear market rally, and our Ewave analysis suggests the rally will die in the $45 area, and the market will plunge drastically.  Investors should avoid this market for now!

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