Technical Analysis Of The Markets

Gold 

Short-Term Update

Gold was lower in the overnight session reaching 1308.00, at the time that this Post was being written, as the Brexit panic is starting to subside.

Now comes the complicated part of… implementation.  We view the drop from the 1362.50 high to the current low of 1308.00 as a correction, although we suspect that wave ^iii^ is starting to subdivide.

We are working on wave ^iii^ of wave *v* of wave .iii., as shown on the Daily Gold Chart above.

We believe that wave ^iii^ has more upside with a projection to 1442.80.

Our count for wave *v* is:

^i^ = 1318.90;

^ii^ =1252.50. 

^iii^:

!i! = 1362.50;

!ii! = 1308.00, if complete, with retracements as follows;

50% = 1307.50. We have reached this level in the overnight session.

61.8% = 1294.50.

Upon completion of wave !ii!, we expect another rally in wave !iii! of ^iii^, as the next big event.

Our first projection for the end of wave ^iii^ of *v* as follows:

^iii^ = 1.618^ = 1442.80

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 little way to before this sequence is complete.

Active Trading Positions: Long 20 positions, with puts at 1250.00

Crude

Short-Term Update

 

Crude reached a low of 45.83 in yesterday’s day session, and in the overnight session we have rallied to a high of 47.70, at the time that this Post was being written. 

It is likely possible that all of wave !c! and ^iv^ could now be complete at the 45.83 low, and that our wave ^v^ rally is now about to begin.

We have satisfied the minimum requirements for a complete wave !c! with a drop to the wave !a! low of 46.40.

On the Intraday Chart the rally from the 45.83 low to the current high of 47.70 looks impulsive.

Our updated current count, from the wave b low of 26.05 is:

^i^ = 43.69;

^ii^ = 39.00;

^iii^:

!i! = 46.78;

!ii! = 43.04;

!iii! = 49.56;

!iv! =49.12;

!v! = 51.67, to complete all of wave ^iii^;

^iv^:

!a! = 46.44;

!b! = 50.52;

!c! = 45.83, if complete, to complete all of wave ^iv^.

^v^ higher has likely now begun.

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

*iii* = 1.618*i* = 61.84.

No change to our current thinking around Suncor. We still expect further downside to at least on minimum target level of 25.31, before all of wave -ii- ends. Retracement levels for all of wave -ii- are:

50% =24.31;

61.8% = 22.98.

We cannot rule the possibility that wave .b. is actually not complete at the 28.57 high and is becoming a small bearish triangle. In this case after this triangle ends, we should drop in our final wave .c., to complete all of wave -ii-.

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 Suncor at 23.75, and crude at 45.35, risking to 43.68.

S&P500

Short-Term Update

The S&P was sharply lower in yesterday’s session reaching, 1991.62. In the overnight session the S&P Futures are up sharply by about 20 points at the time that this Post was being written.

If our current analysis is correct, then all of wave -iv- is now complete at the 1991.62 low. We will go long at the opening, as we believe that wave -v- has begun. The wave -v- rally should take the S&P to one more new record high.

We do want to note that there is a slight possibility that all of wave -iv- did end at 2025.91 and all of wave -v- at 2120.55. This would be a failure high, so we are not giving it much credence at the moment. With all of the uncertainty in world now with Brexit we cannot rule out that the S&P has now run out gas and is now heading sharply lower.                     

Long-Term Update

Wave -i- of (v) is complete at the 1946.70 high; wave -ii- at 1891.00, and wave -iii- at 2111.05. Wave -iv- looks to be complete at the 1991.62 low, and we now expect one more rally in wave -v- to new record highs.

Active Trading Positions: Long at the opening, and buying 2010 puts, as stops

USDX

Short-Term Update

The USDX reached a high of 96.86 in yesterday’s day session, and is off in the overnight session reaching 95.83, at the time that this Post was being written. Brexit excitement is fading for now, just like in the gold market.

There is no change to our current analysis we think that the USDX is still heading higher in wave ^iii^ of *c*, a shown on the Daily USDX Chart.

It now looks like we are working on a very complex irregular type wave .ii. correction. Our minimum target for end of wave *c* and .ii. is the wave *a* high of 98.59.  

Long-Term Trading Update

We still expect lower prices below the 91.00 level. 

Active Trading Positions: None

HUI/GDX and Selected Gold Stocks

Short-Term Update

With gold being down we could see some short term weakness in the GDX and our selected gold stocks today, but we are stilling expecting much higher prices, if our current analysis of gold is correct. No change to our current detailed analysis for these markets.

GDX  

As you can see on the Daily GDX Chart, we are working on the assumption that all of wave (ii) is complete at the 24.80 low. We expect a sharp rally in wave (iii) has now begun. Our current count for all of wave iii is:

(i) = 27.03;

(ii) = 24.80;

(iii) rally is now underway. Our first projection for the end of wave (iii) is:

(iii) = 1.618(i) = 33.04.

SSO:  

As you can see on the Daily SSO Chart, we now believe that wave *iii* is extending as we suggested in our last couple of Posts. We have updated the Daily SSO Chart accordingly. WE should now be rallying in wave .v. of *iii*. Our next projection for the end of wave *iii* are:

*iii* = 2.618*i* = 18.49.

ABX

As you can see on the Daily ABX Chart, we are assuming that all of wave .ii. is complete at the 19.00 low and that we have started wave .iii. higher. Our current count for wave (iii) is;

.i. = 21.40;

.ii. = 19.00;

.iii. rally is now underway, with our first projection being:

.iii. = 1.618.i. = 27.38.

KGC 

As you can see on the 60 Min KGC Chart here, we completed wave (ii) of iii at the 4.69 and we are now rallying in wave (iii).

Our first projection for the end of wave (iii) is: (iii) = 1.618(i) = 6.81

Long-Term Update

Our first impulsive sequence out of wave B lows of the GDX and our selected gold stocks, is likely now complete at the current highs and we are correcting in wave ii, except in ABX, which will be correcting in wave (ii) of iii.

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

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