Technical Analysis Of Major Markets

Gold

Gold reached a low of 1093.50, early in the overnight session and is now back above 1100, at the time that this Post is being written.

All elements are now in place for a completed second wave (c) of 4 diagonal triangle, and now we are waiting for our first impulsive sequence to give us some confidence that the 1080.00(continuous daily futures low), is indeed the major low we have been looking for.

A break above 1117.80, would be helpful to eliminate the possibility that this rally is a small bearish triangle.

Some other facts relative to gold include that the record high short position and now every newspaper and business TV show is taking about the end of gold, etc….

These events are typical at major market highs and lows. The same is being said about the stock market, but in the reverse, as buying is the only thing to (supposedly) do!

Until we see our impulsive wave sequence on the Intraday Chart we cannot rule the possibility that gold will try to drop back to 1080.00 low, one more time. 

Watch for Intraday Posts during this week, as additional buying opportunities may present themselves!

We are long 5 COMEX GOLD positions, with 1100 puts and have 5 more long COMEX GOLD positions, with 1150 puts!

CRUDE OIL

Crude reached a new low of 50.09, in the overnight session. Nothing has changed relative to our comments towards this market, but we did mention yesterday that there is an option where wave ^iv^ ended at 53.81 and that we could be about to complete all of wave ^v^, *c* and our second wave .x., as wave ^v^ could be an ending diagonal triangle.

See the attached Daily Crude Chart for what we are talking about. That ending diagonal triangle would look like:

!i! = 51.27;

!ii! = 53.49;

!iii! = 50.14;

!iv! = 51.56;

!v! = 50.09, if complete, to complete wave ^v^, *c* and our second wave .x.

Our preferred count is that following:

!a! = 53.81;

!b! = 50.09, if complete;

!c! rally to go to at least the wave !a! high of 53.81, to complete all of wave ^iv^.

A break of the upper blue trend line, will be helpful for both options.

From our wave -iii- low of 44.20, our current wave -iv- rally looks like:   

.a. = 51.20;

.b. = 43.58;

.c. = 54.24;

.x. = 42.11;

.a. = 52.48;

.b. = 47.05

.c. = 62.58

.x.:

*a* = 58.14

*b* triangle = 61.57;

*c* is still underway with a *c*=2.618*a* projection of 49.95.

We are long 5 positions, with 50.00 puts!                                                                                        

S&P500

The S&P Futures were flat in the overnight session. 

Wave .a. of -v- of our wave (v) diagonal triangle reached a new high today of 2132.82.

In spite of this marginal new high, the next big event is still going to be a drop in wave .b. which should retrace between 50 to 61.8% of the entire wave .a. rally.

We will provide those retracement levels when we are sure that wave .a. is complete. Wave .b. will consist of at least one 3 wave pattern.

USDX

 

The USDX spiked briefly to 98.30, at the opening of the overnight session and has since dropped to a low of 97.90, at the time that this Post was being written. No changes to our current thinking but:

A break above 98.30, would suggest that we may have to consider our bullish triangle option, and that wave -iv- ended at 95.55. Otherwise, we are still working on the assumption that wave *x* is about to come to an end, after which we should turn down in another *a*,*b*, *c* pattern, within wave -iv-.

*a* = 94.76;

*b* = 100.26;

*c* = 93.16;

*x*:

^a^ = 98.00;

^b^ = 93.30;

^c^ diagonal triangle:

!i! = 96.69;

!ii! = 94.84;

!iii! = 97.44;

!iv! = 95.55;

!v! = 98.30, if complete to complete all of wave *x*

The ^c^=^a^ projection is 98.14.

Our alternate remains that a wave -iv- triangle ended at 95.55 and that we are headed back to at least the 100.71 high.

We just shorted 5 positons in the USDX this morning, risking to 98.31!

NATGAS

On the Intraday Chart the drop from 2.9300 to 2.7855, looks like a double 3 wave pattern. If we are looking for a wave (c), even if it’s a diagonal triangle, then it cannot consist of a double 3 wave pattern, and be complete.

This could suggest that our second wave ^b^ did not end at 2.7855, and that it is becoming a triangle.  Let’s see how this market trades in today’s day session!

If our second wave ^b^ is a developing triangle, then it would look like:

!a! = 2.8234;

!b! = 2.9300;

!c! = 2.7835;

!d! rally is now:

!e! drop to complete all of the wave ^b^ triangle.

Upon completion of wave ^b^ we should expect a rally in wave ^c^ to complete all of wave .c. of our wave -iv- triangle.;

Our current wave -iv- triangle count looks like:

.a.= 3.11;

.b. = 2.56;

.c.:

^a^ = 2.92;

^b^ = 2.44;

^c^= 2.96;

^x^ = 2.64;

^a^ = 2.93;

^b^ triangle is underway;

^c^ rally to at least the 2.96 high, to complete all of wave .c.

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

HUI/XAU/GDX

Almost all gold stocks are now priced for bankruptcy and if you believe that this sector is going to survive then many of these stocks need to be bought at these levels, or at least the XGD or GDX or even the GDXJ. Watch for more Intraday Posts this week, on what we are buying.

We are long the GDX and TSX:XGD, with no stops!!

We started buying Newmont and Barrick today.  More buys on more gold stocks will follow this week.  Look at the great H&S bottom taking shape that we have been following on Newmont. 

Some kind of fundamental event is near that will create the giant C wave higher in gold stocks.  Maybe it’s a war in the Mid-East.  Maybe it’s a collapse of the US stock, bond, or real estate markets.  We don’t know what the event will be, but all our ewave signs suggest that we are on the cusp of something big!

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