Technical Analysis Of The Markets

Gold

Short-Term Update

Gold reached a low of 1226.20 in the overnight session at the time that this Post was being written. We can now confirm that wave ^iii^ ended at 1280.70 and that the current corrective setback is wave ^iv^. As you can see on the attached Daily Gold Chart, it looks like wave ^iv^ has become an irregular type correction as follows:

!a! = 1237.80;

!b! = 1283.70

!c! = 1226.50, if complete the complete all of wave ^iv^.

We want to draw you attention to the retracement levels. As shown on the attached Daily Chart our expected retirement levels for wave ^iv^ are:

23.6% = 1227.70;

38.2% = 1195.10.

With the overnight low we have already reached our 23.6% retracement and it could therefore be possible at all of wave ^iv^ is already over!

We also cannot rule the possibility that wave ^iv^ could become more complex. Once wave ^iv^ is complete we expect a wave ^v^ rally, which has a minimum target of 1283.70, but we expect to at least reach the 1308 level and possibly the 1346 level, before wave ^v^ and all of wave *iii* ends.

With the GDX and our selected gold stocks completing triangle formation, we should expect that all or most of wave ^iv^ is now complete at the 1226.50 low. 

Our updated 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! =1263.40, 1262.90(Daily Continuous Futures);

!iv! triangle =1225.30;

!v!= 1280.70, to complete all of wave ^iii^.

^iv^ = 1226.50, if complete, with details above.

^v^ rally will be next, to complete all of wave *iii*.

Longer-Term Update

Based on the current count, gold is still working on its first impulsive sequence out of its wave (2) of 3 low, and we still have a long way to go before this sequence is complete.

Wave ^iii^ ended at 1280.70 and we are now working on wave ^iv^, which could already be complete at the 1226.50 low. Upon completion of wave ^iv^ we expect a rally in wave ^v^ to complete all of wave *iii*.

 Projection for the end of wave *iii* is:

*iii* = 6.25*i* = 1314.90!

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

Crude

Short-Term Update

In the overnight session crude reached a new low of 36.12, at the time that this Post was being written. 

AS you can see on the attached daily crude Chart we appear to have completed wave *a* at the 39.02 high and are now falling in wave *b*.

We are expecting that wave *b*must consist of at least one 3 wave pattern, but could have up to 3 such patterns.

On the Intraday Chart the drop from the 39.02 high to the current low of 36.12 looks like an INCOMPLETE impulsive drop, so we expect further downside to occur. It is to early to determine what type of wave structure wave *b* is going to have.

We have lowered our stop to 39.05.

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

.a.:

*a*:

^a^ = 33.84;

^b^ = 30.56

^c^= 39.02; to complete just wave *a* of .a.

*b* drop has now begun.

We are still expecting that Suncor should start to drop in wave (iii) if wave *b* in crude is now underway.

Long-Term Update

Wave -iii- is complete at the 26.05 low and we should now be rallying in wave -iv-, as the next big event in the market. We expect a big drop in wave *b*, after wave *a* ends, which could have now occurred at the 39.02 high.

Active Trading Positions: We are short Suncor at 24.75, risking to 28.50, and will also go long Suncor at 13.00.  We are short crude again, risking to 40.00!

S&P 

Short-Term Update:

The S&P Futures are down about 10 points in the overnight session, at the time that this Post was being written.  

We are about 3 points away from our ideal projected target for the end of wave -iii- at 2027.60, as we reached a high of 2024.57 in yesterday’s session.

We have satisfied all of the minimum requirements for a completed wave -iii- rally, so we would not be surprised to see this markets start to fall in at least wave -iv-.

We would like to see one more push so that our short position could get filled, however. It could be possible that wave -iii- is going to continue to rally to our second projected level, which is 2112.02.

If wave -iv- is now about to begin then it should retrace between 23.6 to 38.2% of the entire wave -iii- rally.

We will provide those retracement levels when we are sure that wave -iii- is complete.  

Projected ends for the end of wave -iii- are :

-iii- = -i- = 2027.60

-iii- = 1.618-i- = 2112.02

Another other option is that we now have a 3 wave rally from 1891.00 to the current high of 2022.37. If by some chance all of wave b ended as a failure in the 2135 area, then the S&P could be heading sharply lower.

This option will be confirmed if the S&P drops below the wave -i- low of 1946.70. Although this market has been rallying per our plan, we still remain skeptical that the current rally is really wave (v) and that we are heading to new all-time highs.

Gold and the USDX are telling us something different.

Long-Term Update

Wave -i- of (v) is complete at the 1946.70 high, and wave -ii- at 1891.00. We are now rallying in the tail end of wave -iii- of (v), but we are skeptical about our current count even though it appears to be going our way. 

Active Trading Positions: Will short at 2029.00, with 2040 calls as stops!

USDX

Short-Term Update

The USDX was higher in the overnight session, reaching 96.97, at the time that this Post was being written.  

On the Intraday Chart we now have a 3 wave rally in place from the wave !i! low of 95.94 to the current high of 98.97, but we are still a bit short our 50% retracement level for our wave !ii! rally which is 97.18.

WE will need to see if we get one more push higher to satisfy this 50% retracement level and complete all of wave !ii!. Upon completion of wave !ii! we expect a sharp drop in wave !iii!, as the next big event in this market.     

Our updated count for all of wave *iii* is:

^i^ = 97.03;

^ii^ = 98.42;

^iii^:

!i! = 95.94;

!ii! =96.97, if complete, but we still short of the following retracement levels:

50% = 97.18;

61.8% = 97.47.

!iii! drop is next after wave !ii! ends.

Projections for the end of wave ^iii^ are:

^iii^= 2.618^i^ = 94.36.

^iii^= 4.236^i^ = 91.83.

Projections for the end of wave *iii* are:

*iii*= 1.618*i*=91.03;

*iii*= 2.618*i* = 86.36

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:

^v^ = 95.28, to complete all of wave *i*;

*ii* = 98.59;

*iii* is now underway, and likely subdividing, as shown above.

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. Within wave .iii., we are now falling in wave *iii*, with wave *ii* ending at 98.59.

Active Trading Positions: We are short at 97.90, risking to 98.60!

HUI/GDX and Selected Gold Stocks

Short-Term Update

If wave ^iv^ in gold is complete, it would match the end of triangle formations that have not satisfied all of their individual requirements.

It could be possible that these triangle formations could expand if wave ^iv^ in gold is not complete at the 1226.50 low. 

GDX

As you can see on the attached 60 Min GDX Chart, it is possible that all of wave .e., within our wave -iv- triangle is complete near the 18.86 low!

In order for our current triangle formation to remain valid, we cannot drop below the wave .c. low of 18.81, otherwise our wave (iv) triangle is likely expanding.

If our wave (iv) triangle is complete, then we should expect a sharp thrust higher in wave -v- to be the next big event in this market.

SSO (Silver Standard)

We have attached the Daily SSO Chart. It looks like we are still failing in wave .a. of *ii*, which reached a low today of 7.30. Upon completion of wave .a., we expect a wave .b. rally that should retrace between 50 to 61.8% of the entire wave .a. drop. There is an outside chance that all of wave *ii* is complete at the current lows also.

It looks like the CRJ merger guys are going to be ripped off in this deal, as the 25% premium that was paid to obtain SSO shares has all but evaporated, with the drop in the SSO shares.       

ABX

We have attached the 120 Min Chart. It looks like wave .d. ended at 14.34 and the current drop is all or most of wave .e., to complete all of our wave (iv) triangle. Upon completion of the wave (iv) triangle we should expect a very sharp thrust in wave (v) to complete all of wave i.

KGC

The attached 60 Min KGC Chart also have been revised to show a wave .iv. triangle. It looks like all of wave ^e^ of our wave .iv. triangle formation, could be complete or almost complete at the 2.87 low.

Wave ^e^ cannot drop below the wave ^c^ low of 2.68, otherwise we would need to assume that our triangle formation is expanding. Upon completion of our wave .iv. triangle formation we should expect a sharp wave .v. thrust higher to complete all of wave (iii).

Long Term Update

The GDX and all of our selected stocks/indices have finally completed their respective wave B lows. We are still expecting higher prices, as we complete our first impulsive sequence out of their respective wave B lows.

Active Trading Positions: We are long the GDX, ABX, KGC, NEM, CRJ, and TSX:XGD with no stops!!Heading 2

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Email: [email protected]

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