Technical Analysis Of The Markets

Gold

Short-Term Update

Gold did not accomplish very much in yesterday’s day session, or in the overnight session. On the attached Daily Gold Chart, yesterday’s low appears to have been about 1206. In the overnight session, we reached a high of 1224.70.

We are now waiting for confirmation that all of wave ^iv^ is complete at the 1210 low (1206 on the attached Daily Gold Chart). As we said in yesterday’s Morning Post: “A rally above the 1225 high would be helpful in this effort.”

We think a move above 1225 is imminent.

Our updated count for all of wave ^iv^ is:

!a! = 1237.80;

!b! triangle = 1260.80;

!c! = 1210.00, if complete, to complete all of wave ^iv^.

Our retracement values for wave ^iv^ are:

23.6% = 1227.70;

38.2% = 1195.10.

When wave ^iv^ is complete, wave ^v^ should challenge the 1308 level and possibility the 1346 level also. Our minimum target for the end of wave ^v^ is the wave ^iii^ high of 1280.70.

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^ = 1210.00, if complete;

^v^ rally is next once wave ^iv^ ends, to complete all of wave *iii*.

*iv* correction will be next, after wave *iii* ends.

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. Moreover, we still have a long way to go before this sequence is complete.

We are now working on our wave ^v^ rally, which when complete will complete all of wave *iii*. The wave *iv* correction should retrace between 23.6 and 38.2% of the entire wave *iii* rally.

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:

We are currently working on the assumption that we still have an INCOMPLETE impulsive wave structure that started at the wave B low of 26.05.

Within that incomplete impulsive wave structure, which we have labeled wave *i*, we have either completed all or most of wave ^iv^  at the 38.33 low. When wave ^iv^ ends we expect one more rally in wave ^v^ to complete all of wave *i*.

It could be possible that wave ^iv^ is also going to become more complex and even a triangle. After the completion of wave ^v^ and all of wave *i* we should expect a corrective setback in wave *ii*.

This setback is expected to retrace between 50 to 61.8% of the entire wave *i* rally.

We will be buyers at the end of wave *ii*.

We will provide those retracement levels when we are sure that all of wave *i* is complete.

With crude expected to rally above the 42.49 low, we should see one more push higher in Suncor, above the current high of 28.32, to complete all of wave -i-. 

In the overnight session, crude was lower and reached a low of 38.53, at the time that this Post was being written.  

Long-Term Update

We are now working on the assumption that a major low in wave b of B was reached at the 26.05 low. If this assumption is correct, then crude is now heading sharply higher, at least back to the all-time high of 147.27.

Active Trading Positions: We will go long at the end of wave  -ii-!

S&P500

Short-Term Update:

The S&P500 was higher in yesterday’s day session and the S&P Futures were lower by about 5 points at the time that this Post was being written.

We are simply waiting for confirmation that all of wave *iv* of .iii. is complete at the 2022.49 low. 

In our last End of Week Post we updated our wave (v) count, and wave .iii. of -iii- appears to be subdividing. Our current projected high for end of wave -iii-, has not changed, however and still remains as:

-iii- = 1.618-i- = 2112.02

Upon completion of wave -iii-, we should expect a wave -iv- correction that retraces between 23.6 to 38.2% of the entire wave -iii- rally.

A break now of the 2009.13 wave *i* high would eliminate our current count, and suggest something very bearish could be happening to the S&P.  

Long-Term Update

Wave -i- of (v) is complete at the 1946.70 high, and wave -ii- at 1891.00. We should now be heading to our second projected target for the end of wave -iii- and once that wave is complete, we should expect a drop in wave -iv-. Our minimum target for the end of wave (v) is the all-time high of 2134.72.

Active Trading Positions: Flat!

USDX

Short-Term Update:

 The USDX was lower in yesterday’s day session and in the overnight session.  We are sitting at the 95.85 level, at the time that this Post was written.  We do note that it appears that we had a key daily reversal lower in yesterday’s trading.

After Yellen speaks, we are sure that the USDX will provide us with the clues we need to update our current analysis. 

We still do NOT have a viable alternate for the short outlook in the USDX. The current high in the USDX for this rally out of the 94.61 low is 96.39. 

One possibility could be that even wave !iii! is going to subdivide now, which would be very bearish for this market. We will give this market another day or so to provide us with more evidence on what it is doing.

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

^i^ = 97.03;

^ii^ = 98.42;

^iii^:

!i! = 95.94;

!ii! =97.09,:

!iii! = ??

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

Our short direction remains unclear, longer term, our wave counts suggest a massive decline is coming.

Active Trading Positions: Flat!

HUI/GDX and Selected Gold Stocks

Short-Term Update

Once gold starts to rally in wave ^v^ we expect all of the markets will move higher also.   

GDX

We have attached the 60 Min GDX Chart. We are currently working on the assumption that all or most of wave (iv) is complete at the 19.02 low and that the next big event in the market should be our wave (v) rally.

This wave (v) rally has a minimum target of the wave (iii) high of 21.42. We have pretty much satisfied the minimum requirements for all of wave (iv) in term of wave form and retracement levels.

Wave (iv) could also become more complex and take longer to finally complete than we are now assuming.

ABX

We have attached the 120 Min Chart. It now looks possible that our first impulsive sequence out of the 5.89 low could be complete at the 15.50 high.

We have currently labeled this rally wave i. If that is the case then we should expect a 50 to 61.8% retracement for all of wave i, as we correct in wave .ii. as the end big event. Retracement levels for all of ewave ii are: 

50% = 10.70

61.8% = 9.56

The current low within our wave ii correction is 13.23, which is still way above our 50% retracement level which is 10.70. It is likely that this first drop from the 15.50 high, is likely only wave (a) of ii, and not all of wave ii.

It could also be possible that wave (v) is going to extend, which in this case, wave i is still NOT complete.

If all or most of wave (a) is complete at the 13.23 low, then we should expect a wave (b) rally back to the 15.50 high, as the next big event. 

KGC

We have attached 60 Min KGC Chart. In the case of this gold stock, it looks like our wave .iv. triangle extended and likely ended at 2.89. If our extended wave .iv. triangle is complete at the 2.89 low, then we should expect a sharp thrust higher in wave .v. to complete all of wave (iii), as shown on the attached 60 Min KGC Chart.

We have a projection for the end of wave (iii) at 3.51.

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!

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