US Stock Market: The Meltdown Begins

S&P500

Short-Term Update:

After starting up strongly early in Fridays trading session the SP500 ending up giving back all of those early gains. In the overnight session the SP500 Futures are down about 21 points.

We are working on the assumption that a major top has occurred at the 2954.13 high in the form of wave V.

Ominously, a H&S top pattern is now possibly in play on the SP500 daily chart.  This adds to the concern level for the stock market.

We are now falling in the initial stages of a multi-year wave A low. For the time being we think that wave -i- ended at the 2801.43 low and it is now possible that all of wave -ii- is complete at the 2892.15 high. Our retracement levels for all of wave -ii- are:

50% = 2877.78;

61.8% = 2895.80.

We have reached our 61.8% retracement level and we now need to be guard for a very sharp drop in the SP500 in wave -iii-. Wave -ii- may still be underway as it becomes more complex also. 

Trading Recommendation: Stay short with a call option as a stop.

Active Positions: Very Short with an updated call as a stop!

GOLD

Short-Term Update:

Gold was lower in Friday’s day session and that trend has continued in the overnight session as we reached 1273.40.  

Wave *ii* is still underway and it has become a double 3 wave pattern as shown on the update daily chart.  We are falling in our second wave $c$, which a minimum target of 1267.30, but more likely we will drop into our retracement zone which is:

50% = 1258.50;

61.8% = 1236.90

All of our second wave $c$ and *ii* may end this week.

We will provide our first projections for the end of wave *iii*, when we are sure that wave *ii* is complete.

Longer term our first projection for the end of wave .iii. is:

.iii. = 1.618.i. = 1447.20.

We do have higher projections and wave .iii. should subdivide into a 5wave impulsive sequence on its journey higher.  

Trading Recommendation: Long gold. Use puts as stops.

Active Positions: We are long, with puts as stops!

GDX and Gold Stocks

 Short Term Update:

The GDX was higher in Friday’s trading session, as we reached a high of 20.76.

It now looks like our wave *iv* of -c- triangle has expanded and extended as shown on the 60 Min GDX Chart. We should expect one more small rally to complete this bearish triangle before we move lower again in wave *v*.

Our minimum target for end of wave *v* is 20.14. Our wave *iv* bearish triangle may be complete at the 20.76 high.

Longer-term our first projection for the end of wave 3 is:

3 = 1.618(1) = 48.95.

We have the following counts, for the following:

Kinross: Has now completed its minimum requirements for a completed wave (ii), at the 2.38 low. Wave  (iii) rally is now underway.

Barrick:  We have completed the minimum requirements for a completed wave (ii) at the 9.53 low. Wave (iii) rally is now underway.

HUI: We have completed the minimum requirements for a completed wave (ii), at the 131.12 low. Wave (iii) rally is now underway.

XAU: We have completed the minimum requirements for a completed wave 2 at the 60.59 low. Wave 3 rally is now underway.

Trading Recommendation: We continue to suggest buying all of the above gold stocks and indices, for a long term hold.

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

Free Offer For Gold-Eagle Readers:  Please send me an Email to [email protected] and I’ll send you our latest Wave Counts Tactics report!  We include key wave counts for oil and the CDNX junior stocks index, to help investors make money!

Captain Ewave & Crew

Email: [email protected]

Website: www.captainewave.com

Risk: CAPTAINEWAVE.COM IS AN IMPERSONAL ADVISORY SERVICE. AND THEREFORE, NO CONSIDERATION CAN OR IS MADE TOWARD YOUR FINANCIAL CIRCUMSTANCES. ALL MATERIAL PRESENTED WITHIN CAPTAINEWAVE.COM IS NOT TO BE REGARDED AS INVESTMENT ADVICE, BUT FOR GENERAL INFORMATIONAL PURPOSES ONLY. TRADING STOCKS DOES INVOLVE RISK, SO CAUTION MUST ALWAYS BE UTILIZED. WE CANNOT GUARANTEE PROFITS OR FREEDOM FROM LOSS. YOU ASSUME THE ENTIRE COST AND RISK OF ANY TRADING YOU CHOOSE TO UNDERTAKE. YOU ALSO AGREE TO BEAR COMPLETE RESPONSIBILITY FOR YOUR INVESTMENT RESEARCH AND DECISIONS AND ACKNOWLEDGE THAT CAPTAINEWAVE.COM HAS NOT AND WILL NOT MAKE ANY SPECIFIC RECOMMENDATIONS OR GIVE ADVICE TO YOU OR ANY OF ITS CLIENTS UPON WHICH THEY SHOULD RELY. CAPTAINEWAVE.COM SUGGESTS THAT THE CLIENT/MEMBER TEST ALL INFORMATION AND TRADING METHODOLOGIES PROVIDED AT OUR SITE THROUGH PAPER TRADING OR SOME OTHER FORM OF TESTING. CAPTAINEWAVE.COM, ITS OWNERS, OR ITS REPRESENTATIVES ARE NOT REGISTERED AS SECURITIES BROKER-DEALERS OR INVESTMENT ADVISORS EITHER WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION OR WITH ANY STATE SECURITIES REGULATORY AUTHORITY. WE RECOMMEND CONSULTING WITH A REGISTERED INVESTMENT ADVISOR, BROKER-DEALER, AND/OR FINANCIAL ADVISOR. IF YOU CHOOSE TO INVEST WITH OR WITHOUT SEEKING ADVICE FROM SUCH AN ADVISOR OR ENTITY, THEN ANY CONSEQUENCES RESULTING FROM YOUR INVESTMENTS ARE YOUR SOLE RESPONSIBILITY.

ALL INFORMATION POSTED IS BELIEVED TO COME FROM RELIABLE SOURCES. CAPTAINEWAVE.COM DOES NOT WARRANT THE ACCURACY, CORRECTNESS, OR COMPLETENESS OF INFORMATION AVAILABLE FROM ITS SERVICE AND THEREFORE WILL NOT BE LIABLE FOR ANY LOSS INCURRED. DUE TO THE ELECTRONIC NATURE OF THE INTERNET, THE CAPTAINEWAVE.COM WEBSITE, ITS E-MAIL & DISTRIBUTION SERVICES AND ANY OTHER SUCH "ALERTS" COULD FAIL AT ANY GIVEN TIME. CAPTAINEWAVE.COM WILL NOT BE RESPONSIBLE FOR UNAVAILABILITY OF USE OF ITS WEBSITE, NOR UNDELIVERED E-MAILS, OR "ALERTS" DUE TO INTERNET BANDWIDTH PROBLEMS, EQUIPMENT FAILURE, OR ACTS OF GOD. CAPTAINEWAVE.COM DOES NOT WARRANT THAT THE TRANSMISSION OF E-MAILS, OR ANY "ALERT" WILL BE UNINTERRUPTED OR ERROR-FREE. CAPTAINEWAVE.COM WILL NOT BE LIABLE FOR THE ACTS OR OMISSIONS OF ANY THIRD PARTY WITH REGARDS TO CAPTAINEWAVE.COM DELAY OR NON-DELIVERY OF THE CAPTAINEWAVE.COM NIGHTLY EMAILS OR "ALERTS". FURTHER, WE DO NOT RECEIVE ANY FORM OF PAYMENT OR OTHER COMPENSATION FOR PUBLISHING INFORMATION, NEWS, RESEARCH OR ANY OTHER MATERIAL CONCERNING ANY SECURITIES ON OUR SITE OR PUBLISH ANY INFORMATION ON OUR SITE THAT IS INTENDED TO AFFECT OR INFLUENCE THE VALUE OF SECURITIES.

THERE IS NO GUARANTEE PAST PERFORMANCE WILL BE INDICATIVE OF FUTURE RESULTS. NO ASSURANCE CAN BE GIVEN THAT THE RECOMMENDATIONS OF CAPTAINEWAVE.COM WILL BE PROFITABLE OR WILL NOT BE SUBJECT TO LOSSES. ALL CLIENTS SHOULD UNDERSTAND THAT THE RESULTS OF A PARTICULAR PERIOD WILL NOT NECESSARILY BE INDICATIVE OF RESULTS IN FUTURE PERIODS. THE RESULTS LISTED AT THIS WEBSITE ARE BASED ON HYPOTHETICAL TRADES. PLAINLY SPEAKING, THESE TRADES WERE NOT ACTUALLY EXECUTED. HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED TRADES DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE OVER OR UNDER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS SUCH AS LACK OF LIQUIDITY. YOU MAY HAVE DONE BETTER OR WORSE THAN THE RESULTS PORTRAYED. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. NO INDEPENDENT PARTY HAS AUDITED THE HYPOTHETICAL PERFORMANCE CONTAINED AT THIS WEBSITE, NOR HAS ANY INDEPENDENT PARTY UNDERTAKEN TO CONFIRM THAT THEY REFLECT THE TRADING METHOD UNDER THE ASSUMPTIONS OR CONDITIONS SPECIFIED HEREAFTER. WHILE THE RESULTS PRESENTED AT THIS WEBSITE ARE BASED UPON CERTAIN ASSUMPTIONS BELIEVED TO REFLECT ACTUAL TRADING CONDITIONS, THESE ASSUMPTIONS MAY NOT INCLUDE ALL VARIABLES THAT WILL AFFECT, OR HAVE IN THE PAST AFFECTED, THE EXECUTION OF TRADES INDICATED BY CAPTAINEWAVE.COM. THE HYPOTHETICAL RESULTS ON THIS WEBSITE ARE BASED ON THE ASSUMPTION THAT THE CLIENT BUY AND SELLS THE POSITIONS AT THE OPEN PRICE OF THE STOCK. THE SIMULATION ASSUMES PURCHASE AND SALE PRICES BELIEVED TO BE ATTAINABLE. IN ACTUAL TRADING, PRICES RECEIVED MAY OR MAY NOT BE THE SAME AS THE ASSUMED ORDER PRICES.