Technical Analysis Of The Markets

Gold

Short-Term Update

Gold reached a new high for our wave !b! of ^iv^ triangle rally in the overnight session at 1264.60, at the time that this Post was being written.

As the attached daily Gold Chart indicates we are working on a wave ^iv^ corrective pattern, with the current rally being wave !b!. It is difficult to say whether all of wave !b! is complete at the 1264.60 high.  Although it likely is, we could continue higher to our next resistance point of 1270 before all of wave !b! ends.

Wave !b! could also be complete at the current high of 1264.60. Upon completion of wave !b! we expect a drop in wave !c! as shown in the attached Daily Gold Chart. Wave !b! cannot rally above the 1284ish high and wave !c! cannot fall below the wave !a! low of 1206.00, for this triangle option to remain valid.

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^ triangle:

!a! = 1206.00;

!b! = 1264.60, if complete;

!c! setback will be next, upon completion of wave !b!;

^v^ rally is next, after completion of wave ^iv^, 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, and we still have a long way to go before this sequence is complete.

Wave ^iv^ has become more complex and once it is complete, if it is not already at the 1210.30 low, then we should expect a 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

Crude reached 40.91 in the overnight session, at the time that this Post was being written.

We are only 3 ticks from our 78.6% retracement level for wave ^b^ which is 40.94. If our current analysis is to remain valid we must turn down NOW, otherwise, it looks like all of wave *ii* ended at the 35.24 low, which is short of our 50% retracement level, for all of wave *ii*.

We would then be rallying in a powerful wave *iii*.   

The updated count for all of wave *ii* is:

^a^ = 35.24;

^b^:

$a$ = 38.29;

$b$ = 36.70;

$c$ = 40.91, if complete, to complete all of wave ^b^.  

^c^ should now be underway with a drop to reach our expected retracement levels shown below, to complete all of wave *ii*.

Our minimum target for wave ^c^ and all of wave *ii* is the wave ^a^ low of 35.24, but we are expecting wave ^c^ and wave *ii* to at least reach our 50% retracement zone which 34.27, before all of wave *ii* ends. 

Our retracement levels for all of wave *ii* are 

50% = 34.27;

61.8% = 32.33.

No changes to our current Suncor analysis as we wait for this market to decide is all of wave -i- is complete at the 28.32 high. If it is then, a drop in wave -ii- should be the next big event in this market. 

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 33.25, risking to 30.00.

S&P500 CHART 

Short-Term Update

The S&P Futures are up about 5 points in the overnight session at the time that this Post was being written. We are waiting for confirmation that all of wave .iv. is complete at the 2041.08 low, and that wave .iv. is not becoming more complex.  

If wave .iv. is now complete at that low, then we should now expect the S&P to rally in wave .v. to at least the 2075.08 high, but more likely to our projected wave -iii- high of 2112.02. Just in case, wave .iv. is still not complete, our retracement levels for all of wave .iv are:

23.6% = 2041.28

38.2% = 2020.37

We also cannot rule out the possibility that wave .iv. is going to become more complex and even become a bullish triangle, which would just delay our upcoming wave .v. rally.

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 continued to drop in the overnight session.  We reached 93.62, at the time that this Post was being written. The USDX is trying to hold support at the 93.83 low, but we think that this support is not going to hold, and we still see further weakness as we head to our projected target of 92.41, for all of wave $iii$. 

Failing to hold the 93.83 low, should see use quickly drop to the 92.52 low, which is basically our projected short term target.

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

^i^ = 97.03;

^ii^ = 98.42;

^iii^:

!i! = 95.94;

!ii! =97.09,:

!iii!:

$i$ = 94.61;

$ii$ = 96.42;

$iii$ drop is now underway, with a projection of: $iii$ =1.618$i$ = 92.41

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

It looks like wave *iii* continues to subdivide to the downside which is very bearish for this market.

Active Trading Positions: Flat.

HUI/GDX and Selected Gold Stocks

Short-Term Update: 

If wave !b! is still not complete at the 1264.60 high, then we should expect the GDX and our selected gold stocks to continue higher. In the short term, they are getting a little stretched so a small correction is due. Our current analysis for the GDX and our selected gold stocks: 

GDX 

As you can see on the 60 Min GDX Chart, we continued to rally in our wave -v- of (iii) thrust, reaching 22.79.

Although we still do not see an end to wave -v- and all of wave (iii), we need to be on guard for a potential top in wave (iii). We can still move higher. Upon completion of wave (iii), we expect a wave (iv) correction that should retrace between 23.6 to 38.2% of the entire wave (iii) rally. 

SSO

As you can see on the Daily SSO Chart, this stock was sharply higher yesterday, and we can now conclude that all of wave *ii* is complete at the 6.92 low. We are now moving sharply higher in wave *iii*. Projections for the end of wave *iii* are:

*iii* = 1.618*i* = 14.07;

*iii* = 2.618*i* = 18.49;

*iii* = 4.236*i* = 25.64

KGC

As you can see on the 60 Min KGC Chart, we continue to rally in wave ^iii^ of (iii), and expect more upside in the days ahead.

Our target for the end of wave ^iii^ is 4.33, with our current high being 4.23, but we should now be on guard for the end wave ^iii^ to be at hand in the coming day or so. Upon completion of wave ^iii^, we should expect a small wave ^iv^ correction that retraces between 23.6 to 38.2% of the entire wave ^iii^ rally.

Our current wave .v. count looks like:

^i^ = 3.58;

^ii^ = 3.21;

^iii^ = 4.23, if complete;

^iv^ correction is next, after the completion of wave ^iii^.

Our first projection for the end of wave ^iii^ is:

^iii^ 1.618^i^ = 4.33.

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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