Technical Analysis Of Major Markets

Gold

Late in yesterday’s day session, gold reached a low of 1058.20, and in the overnight session, that low held.

We are now looking for the first signs of an impulsive sequence.  That will confirm that all of wave *b* of .b. is complete at the 1058.20 low.

A break above the overnight high of 1068.00 would be a good sign in that effort!

Our updated count for wave .b. is: 

*a* = 1088.20;

*b* = 1058.20, if complete. Our 61.8% retracement of wave *a* is 1061.60.

*c* rally to go.  

Our retracement levels for all of wave .b. are:

50% = 1118.60;

61.8% = 1135.80.

Unfortunately, upon completion of wave .b., we would expect one more drop in wave .c. to at least the 1045.40 low to complete all of wave 4 or wave ii of 3.

We are long 20 positions, with puts at 1085.00!

Crude Oil

Crude reached a high of 37.10, in the overnight session. We are expecting a major low, in our wave *c* ending diagonal triangle, which is part of wave (iv) as follows:

-a- = 49.33:

-b-:

*a* = 43.21;

*b* = 50.91;

*c* ending diagonal triangle = 34.54, if complete, to complete all of wave -b-;

-c- rally is next.

Our projections for the end of wave -c are:

-c-= 1.618-a- = 53.28;

-c-= 2.618-a- = 64.86.

In order for us to confirm that wave -b- is now complete we will need crude to rally above the down trend line connecting 48.36 and 43.46.

We also mentioned in yesterday’s End of Day Post, that we need to see a clear impulsive wave structure coming out of the 34.54 low to give some confidence that wave -b- is complete at the 34.54 low.

On the Intraday Chart, we are starting to see that wave development, and based on the current pattern we should expect one more rally above the overnight high of 37.10, to complete the minimum requirements for that first impulsive sequence.

The bottom line: Evidence is building a major low in crude has been made at 34.54.

We are long 15 positions, with 42.00 puts, plus 5 positions with 37.00 puts, as stops!                   

S&P500 

The S&P Futures are up about 14 points at the time that this Post was being written. As we indicated in yesterday’s Post we are now assuming wave -v- to all time new highs (very temporarily!) is now underway.

Before Ewave enthusiasts get too excited about the rally, please view this longer term wave analysis for the SP500:

Regular technical analysis doesn’t allow for this kind of scenario, where a top pattern forms, and then the price goes a bit higher before collapsing, but that’s exactly what our wave analysis suggests is about to happen!

USDX

In the overnight session, the USDX reached a low of 97.23. All of our current options remain valid, and we are starting to lean a bit to the alternate option where wave .iv. is not complete and we are heading back to 97.21 low. 

The USDX remains at the crossroads, as to whether all of wave .iv. is complete at the 97.21 low, or are we going to continue to drop to at least the 92.51 low, in our alternate count for wave .iv., as shown in red on the attached Weekly USDX Chart.

The trigger point for this decision will be if the USDX trades below the wave .i. high of 96.64. If it does then we will have overlap with wave .iv. which is not allowed, and then the alternate count for a drop to at least the 92.51 high will become the preferred.

So if wave .iv. is complete at the 97.21 low, then we have the following count:

*a* = 97.59;

*b* = 98.90;

*c* = 97.21, to complete all of wave .iv. 

We would then be working on wave .v. higher with a minimum target of 100.71, which is the wave -iii- high.  

The details of our other Options are:

Option 1:  The USDX continues to fall from here and overlaps with the wave .i. high of 96.64, then we will adopt as our alternate as the preferred. On the Intraday Chart, if this analysis is correct, then the USDX should be falling in a sharp wave .c. of -iv-. This wave .c. drop could be developing into:                               

*i* = 97.60;

*ii* = 98.90;

*iii*:

^i^ = 97.21;

^ii^ = 98.08, if complete, with a retracement zone of between 50 to 61.8% of the entire wave ^i^ drop. These values are: 98.05 and 98.25, respectively;

^iii^ lower may have started, and a break of the 97.21 low would likely confirm this to be the case. 

Option 2  Wave *b* of .iv. is becoming more complex, like an irregular type correction, and will again revisit the 98.90 area before wave *b* ends.

For the time being we will assume that all of wave .iv. is now complete at the 97.21, but we remain suspicious based on what gold is doing. We will leave our short order positions in play for another day.

Our current count for all of wave -v- is:

.i. = 96.64;

.ii. = 93.83;

.iii. = 100.58;

.iv. = 97.21, if complete now;

.v. rally to go to at least the 100.71, wave -iii- high.

In Friday's day session the USDX reached a low of 97.32.

We will short 5 at 99.25, risking to 100.59!

NatGas

AS you can see on the attached daily NG Chart, there is a gap down in yesterday’s trade. Although not part of EWave theory, this gap down is likely an exhaustion gap, which is a sign that an imminent reversal in the market is at hand. We appear to be at the final stages of wave (iii).

In the overnight session, NG continued to drop reaching 1.857, at the time that this Post was being written.

Like crude we will need to give this market a couple of days, so that we can see a clear impulsive wave structure out of the 1.862 low…We should very soon be embarking on a multi-month wave (iv) rally that is expect to see the price of NG almost double, before all of wave (iv) ends!

Upon completion of wave (iii), we will give our projections for the end of wave (iv), which will be a retracement that ranges between 23.6% and 38.2% of the entire wave (iii) drop.

The wave (iv) rally should reach the 3.00 to 3.50 level!

HUI/GDX

Unfortunately, we still assume that this market will be heading back to the 12.62 low at least one more time.

If crude oil is putting in a major low, which we believe it is and have put serious money on the line betting that it is, gold and golds should soon follow the crude market, to the upside!

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

Email: [email protected]

Website: www.captainewave.com

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