Technical Analysis Of The Markets

Short-Term Update

Gold reached a high of 1303.90 in the oTechnical Analysis Of The Markets vernight session at the time that this Post was being written.

At the moment we are working on the assumption that we are still in our wave ^v^ of *iii* thrust. The current high for this wave is 1306.00.

Based on that what we see in the Intraday Chart, it looks like gold still wants to go higher.

Our initial target is the 1308 high, but as we have said in previous Posts a sharp run to the 1348 level could also be possible.

This move higher, whether to the 1308 high, or to the 1348 high, should mark the end of wave *iii*.

Upon completion of the wave *iii* we should expect a wave *iv* correction that retraces between 23.6 and 38.2% of the entire wave *iii* rally. We will provide those projections, when we are sure that all of wave *iii* is complete.

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 likely have a little way to before this sequence is complete.

We now need to be guard for the of wave *iii* and the start of our wave *iv* correction.

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

Crude

Short-Term Update:

Crude reached a low of 44.16 in the overnight session, at the time that this Post was being written.

On the Intraday Chart the drop from 46.77 to the current low of 44.16 has overlapping waves, which suggests that this move is a correction, in what we believe to be is a subdividing wave ^iii^ of *iii* rally.

If this observation is correct then once this correction ends, crude should move higher again. We did indicate previously that we thought that wave ^iii^ was going to subdivisions and this correction is likely part of those subdivisions. 

We will start to add the subdivisions to our wave ^iii^ count below, once they start to become clear. 

Our current count is:

^i^ = 43.69;

^ii^ = 39.00;

^iii^ rally is now with following projections:

^iii^ = 1.618^i^ = 52.67;

^iii^ = 2.618^i^ = 61.11.

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

*iii* = 1.618*i* = 61.84.

For Suncor, we expect further gains within wave -i- as crude moves higher in wave *iii*. 

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: Flat, but looking to go long soon, and maybe today for a short term swing trade!

S&P500

Short-Term Update

Yesterday’s End of Day Post was completed before the markets closed, and it looks like the S&P has taken our alternate path, where all of wave -iv- could now be complete at the 2052.61.

This is shown on the attached 120 Min S&P Chart. If that is the case then we are now heading to all time new highs in wave -v-. Our minimum target for this move would be the all-time high of 2134.72.

Although wave -iv- does have a completed 3 wave drop and has reached our 23.6% retracement level, the time it took for this correction is a bit short for our liking.

This might indicate that wave -iv- is NOT complete, and could become more complex or even a bullish triangle.

Just in case wave -iv- is now complete our retracements levels are as follows:

23.6% = 2057.41;

38.2% = 2025.61.

In our last End of Day Post we did say: “There is an outside chance that all of wave .iv. is complete at the 2052.61 low, also. If that is the case, then we should expect one more push in wave -v- to all time new highs.”                                                                                                              

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 drop in wave -iv-. Our minimum target for the end of wave (v) is the all-time high of 2134.72. 

From there, we remind you of our longer term wave counts outlook, which is for a meltdown to below the lows of the 2008 financial crisis.

Active Trading Positions: Flat, but we may try a short term trade to the upside today, given this morning’s pullback that offers us a decent risk-reward play on the –iv- to –v- wave rally!  Regardless, the big action is going to come on the short side, as the SP500 approaches our B wave peak!

USDX

Short-Term Update

In the overnight session the USDX failed to hold the 92.50 level and dropped sharply reaching 91.89, at the time that this Post was being written.

In spite if this drop we suspect that all or most of wave !iii! is likely complete at the 91.89 low, and that we should expect a small wave !iv! correction, as the next big event in this market.

Wave !iv! cannot rally above the wave !i! low of 93.62 for our current analysis to remain valid.

We suspect wave !iv! will likely challenge the 92.50 resistance level and then turn lower in wave !v!.

Long-Term Trading Update

It looks like all of wave ii was completed at the 100.71 high and we are now heading sharply lower in wave iii.

Active Trading Positions: Flat. 

HUI/GDX and Selected Gold Stocks

Short-Term Update

We have been warning of potential top in the GDX and our selected gold stocks, but that top will only occur when gold completed its current wave ^v^ thrust.

GDX

As you can see on the 60 Min GDX Chart, it now looks like we are getting close to the end of a completed 5 wave impulsive sequence that started at the wave B low of 12.51.

We have satisfied the minimum requirements for that completed impulsive sequence now, but we cannot rule the possibility that our wave (v) thrust is going to subdivide and that we are still going a lot higher.

Upon completion of wave I, we expect a larger correction in wave ii. This correction is expected to retrace between 50 to 61.8% of the entire wave i rally. 

SSO

As you can see on the Daily SSO Chart, wave .i. continues to move higher reaching 12.03 in Friday's session.

We expect that a top is near, once the wave ^v^ thrust in gold ends.

Upon completion of wave .i. we expect a wave .ii correction that retraces between 50 to 61.8% of the entire wave .i. rally, as the next big event. We will provide those retracement levels once wave .i. ends.

In the longer term, 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, like the GDX we are getting close to completing 5 wave impulsive sequence that started at the wave B low 1.31

When the wave ^v^ thrust in gold ends, and its wave *iv* correction starts then we should expect that wave ii is KGC will start.

Wave ii is expected to retrace between 50 to 61.8% of the entire wave ii rally. We will provide those retracement levels when we are sure that wave i is complete.

Long-Term Update

We need to be on guard for the end of our first impulsive sequence out of wave B lows of the GDX and our selected gold stocks. The next big event in these markets will be a 50 to 61.8% correction of that first impulsive move higher.

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

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Free Trades Offer For Gold-Eagle Readers:  Send me an email to [email protected] and I’ll send you my next couple short term ewave trades for free!

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