Technical Analysis Of The Markets

Gold

Short-Term Update:

In the overnight session Gold dropped to 1186.10 before recovering to 1197.70. On the Intraday Chart the drop from 1201.20 to 1186.10 looks corrective.  Therefore, we expect that once this correction ends, if it has not already done so at the 1186.10 low, gold might move higher above 1201.10.

Our next target is the 1219.30 projected high for the end of wave !iii!, although we have higher projections also! 

Our initial count for wave (3) of 3 is as follows: 

*i* = 1088.30

*ii* = 1046.80;

*iii*:

^i^ = 1081.40;

^ii^ = 1056.60;

^iii^:

!i! = 1113.10;

!ii! = 1071.10;

!iii!  = 1201.20, if complete;

!iv! drop after the completion of wave !iii!.

Projections for the end of wave *iii* are:

*iii* = 4.236*i* = 1226.80;

*iii* = 6.25*i* = 1314.90.

We see no end in the gold rally.

Long-Term Update

In the very long term we are now rallying in wave V, and with wave V we have the following count:

1 = 1033.90;

2 = 681.00;

3:

(1) = 1923.70;

(2) = 1045.40;

(3) rally is now underway.

Projections for the end of wave (3) are as follows:

((3)) = 1.618((1)) = 3056.10;

((3)) = 2.618((1)) = 4298.80 

Based on the above count we can provide some projections for the end of wave 3, as follows:

3 = 2.618(1) = 3085.10;

3 = 4.236(1) = 4345.70;

3 = 6.25(1) = 5914.80.

The reason that we doubt that the 1045.40 low is a wave 4 is because it corrected over 61.8% of the rally from 681.00 to 1923.70. This is too deep for a wave 4 correction, but more in line with a wave (2) type retracement. 

Active Trading Positions: Long 20 positions, with puts at 1085.00!

Crude

Short-Term Update:

 

We are currently working on the idea that we are in a wave *iv* of -iii- triangle, and within that triangle we should have completed wave ^d^ at the 29.58 low.

Our current wave *iv* triangle option looks like 

^a^ = 34.82;

^b^ = 29.40;

^c^ = 33.60

^d^ = 29.58, if complete;

^e^ rally to go, to complete all of wave *iv*.

For the above triangle to stay valid we cannot trade below the wave ^b^ low of 29.40. If we do, then either the triangle is expanding and we are only falling in wave ^b^, and not wave ^d^, or wave *iv* is becoming more complex and finally wave *iv* could have ended at 34.82, and we are now falling in wave *v* to complete all of wave -iii-.

Long-Term Update:

Wave *iv* looks to be an incomplete triangle, and upon its completion we should drop in wave *v* to complete all of wave -iii-,.

Upon completion of wave -iii-, we expect a multi-month rally in wave -iv-. This rally should reach our upper red trend line as shown on the Daily Crude Chart. 

Active Trading Positions: Will short Suncor at 24.75, risking to 27.00, and will buy Suncor at 13.00!

S&P500

Short Term Update:

The S&P Futures are down about 20 points at the time that this Post was being written.   

A break of the wave (iv) low 1812.29, would confirm that major top in the S&P has been made somewhere in the 2100/2135 level.   

It appears very unlikely that the current wave (iv) low is going to hold. If we do break below the level, then a major top in the S&P has occurred, and very sharp drop in this index is likely going to occur.

For the time being will stick with our current count, but believe it will likely not survive past the next few overnight sessions. That count current looks like:

.i. = 1908.65;

.ii.:

*a* = 1875.97;

*b* = 1916.89;

*c* = 1872.70;

*x* = 1947.20;

*a* = 1872.23;

*b* = 1927.35;

*c* = 1828.46, if complete, to complete all of wave .ii. 

.iii. rally is next.

It is very important that that this current “rally” becomes impulsive, for if it becomes corrective (ie: only a 3 wave rally), then the S&P has topped in some kind of failure at the 2100/2150 level and this market is almost certainly heading significantly lower.

Long-Term Update: 

A major top in the S&P has probably occurred somewhere as a failure top in the 2100/2140 area!

Active Trading Positions: Flat!

USDX

Short Term Update:

The USDX reached a low of 96.32 in the overnight session, at the time that this Post was being written. We are working on the assumption that wave ^iv^ is complete at the 97.50, and that the current drop is wave ^v^.

We cannot rule out the possibility that wave ^iv^ could become more complex and even a triangle, but if we are falling in wave ^v^ of *i* of -c- then our minimum target for this drop is the wave ^iii^ low of 96.04.

Our current count for wave -c- is:

.i. = 97.59;

.ii. = 99.95

.iii.:

*i*:

^i^ = 98.45;

^ii^ = 99.88;

^iii^ = 96.04;

^iv^ = 97.50, if complete;

^v^ is now, complete all of wave *i*;

*ii* rally will be next.

We have the following projections of all of the wave .iii. drop:

.iii. = 1.618.i. = 94.53;

.iii. -= 2.618.i. = 91.18;

.iii. = 4.236 i = 85.76.

Long Term Trading Update

We should be falling sharply in wave .iii. in the next couple of weeks or months. The Weekly USDX chart shows our expected path for all of wave -c-, and projections for its end at either 88.3 or 80.79.

Active Trading Positions: We are short, risking to 98.80!

NatGas:

Short-Term Update:

NG dropped to 2.065 in the overnight session, at the time that this Post was being written,. We are working on the assumption that we are rallying in wave -c- and expect that rally will be impulsive looking. If that is the case, then our current count for wave -c- is :

^i^ = 2.171;

^ii^ = 2.065, if complete;

^iii^ rally is next.

Retracements for end of wave ^ii^ are:

50% = 2.063;

61.8% = 2.037;

The drop in NG in the overnight session has reached our minimum 50% retracement level for a completed wave ^ii^. If wave ^ii^ is complete at the 2.065 level, then the next big event in this market should be a wave ^iii^ of -c- rally.

A significant rally above the wave ^i^ high of 2.171 would confirm to us that wave ^ii^ ended at 2.065.

Long-Term Trading Update: 

Our retracement levels for all of wave (iv):

38.2% = 2.91;

50% = 3.29.

For the time being we will assume that wave (iv) is a simple -a-, -b-, -c- pattern, and within that count we have:

-a- = 2.494;

-b-:

.a. = 2.045;

.b. = 2.315;

.c. = 1.954, to complete all of wave -b-;

-c- rally is now and should rally to at least the wave -a- high, but more likely to our 38.2%/50% retracement zone shown above.

Projections for the end of wave -c- are 

-c- = -a- = 2.77;

-c- = 1.618-a- = 3.28.

Active Trading Positions: We are long 5 positions at 2.04, risking to 1.95!

HUI/GDX and Selected Gold Stocks:

Short-Term Update:

If the small correction in gold is complete, then we expect the GDX and our selected gold stocks to keep moving higher, and in the case of ABX, to our next target of 15.09!   

With gold being sharply higher, so is GDX . Like gold, we see no end in sight to this rally out of our wave B low of 12.40.

As you can see on the attached 120 Min ABX Chart we reached our (iii)=1.618(i) target of 12.15, actually hitting 12.47, as today’s high. It might be possible that all of wave (iii) is complete at the 12.47 high, in which case we should expect a drop in wave (iv). Wave (iv) is expected to retrace between 23.6 and 38.2% of the entire wave (iii) rally. It might also be possible that wave (iii) is extending higher and in that case our next target is (iii)=2.618(i) = 15.09.

Long-Term Update:

Long Term HUI, Long Term XAU, Long Term Kinross and Long Term ABX Charts have all broken major down trend lines, which is technically signaling a major change in direction. All of the those stocks/indices have finally completed their respective wave B lows.

We will provide projections for their wave C highs over the next couple of weeks, but the rally in these stocks should be spectacular over the next couple of years. We are very long all of these stocks!

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

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