Technical Analysis Of Major Markets

GOLD

Gold was weaker in the overnight session reaching a low of 1169.10, at the time that this Post was being written.

It appears that wave .b. of our wave -d- triangle is not complete at the 1168.10 low, as we had previously suggested so we are now expecting another visit to that low.

Our updated wave -d- count is:

.a. = 1191.80;

.b. = 1168.10, if complete;

.c  rally is the next big event.

The weakness in gold is starting to become a concern considering the weakness in the USDX and S&P, although the nature of the USDX move higher is corrective, rather than impulsive.  On the Intraday Chart, yesterday’s drop from 1187.30 to 1173.30 is full of overlapping waves, which is corrective, which suggests that gold is going higher.

Regardless, because of our concerns, a drop back to the 1141.60 low cannot be ruled out now.

Markets do not like gaps and the drop in gold yesterday has filled the gap created by the overnight Greece default news.

Projection for the end of wave .c.: .c.=1.618.a.=1216.20

For the moment we are assuming that wave -d- will consist of only one .a., .b., .c. pattern, but we cannot rule the possibility that wave -d- will consist of a couple of .a., .b., .c. patterns. 

No change to our current 17 long positions, risking to 1141.50!

CRUDE OIL

Crude dipped to 57.95 in the overnight session. This drop does not really change anything, except where wave ^c^ likely ended.

We still believe that all our most of wave ^c^ is now complete, and we expect crude to rally in at least one 3 wave pattern within wave ^d^.

Wave ^d^ cannot trade above the wave ^b^ high of 61.82.

We are long 8 positions, risking to 56.50!                                                                                        

S&P500

The S&P futures were up about 15 points in the overnight session, on rumors of a last minute Greek deal. It is very unlikely there will any sort of “deal”, until at least the July 5^th referendum has been held, and that “deal” will only be more debt that puts the country in more trouble, but:

From an EWave point of view it is likely that wave .i. ended at 2057.51 and that we are now rallying in wave .ii.

If that is the case, then we should expect wave .ii. to rally between 50 to 61.8% of the wave .i. drop, which would be:

50% = 2093.52;

61.8% = 2102.30.

This range will also test our lower red trend line. We will likely add to our short positions at the end of wave .ii., and the signal for us will be if wave .ii. rallies in a 3 wave pattern.

We cannot rule the possibility that this wave -v- ending diagonal triangle is simply extending and that the S&P will make all time new highs in the months ahead. For the time being this will be our alternate scenario.  

Ewave “newbies” should understand that ending diagonal triangles tend to come at the end of massive Wave 5 moves, and they often extend.  That’s normal, but the tremendously bearish implications of these situations should not be taken lightly!

We are short 3 SP500 positions at 2115, and 5 at 2070, risking all to 2130.00!

USDX

The USDX rallied to 95.60 in the overnight session, and on the Intraday Chart, it looks like this rally is corrective in nature.

This suggests that the USDX is heading lower after this correction is complete, which is good news for gold! 

This current rally is likely wave .ii. of ^iii^.  

Our updated wave -iv- count is: 

*a* = 94.88;

*b* = 100.27;

*c* = 93.16;

*x* = 97.87;

*a* = 94.67;

*b* = 96.95;

*c*:

^i^ = 94.30;

^ii^ = 96.68;

^iii^:

.i. = 94.87

.ii. rally is now. Retracements for the end of wave .ii. are:

50% = 95.78;

61.8% = 95.99.

We have almost reached our 50% retracement level.

Projections for the end of wave ^iii^ are:

^iii^ = 1.618^i^ = 92.39;

^iii^ = 2.618^i^ = 89.74.

A projection for the end of our second wave *c* are:

*c* = 1.618*a* = 91.77

We are short 5 positions, risking to 96.96!

NATGAS

NG continues to be range bound.

We reached a high in the overnight session of 2.82. As we indicated in yesterday’s End of day Post, we are not sure whether wave .e. ended at 2.87 or not.

For the time being we will assume that wave .e. is still underway.   

In this case the wave -iv- triangle would look like: 

.a. = 3.11;

.b. = 2.56;

.c = 2.96;

.d = 2.71;

.e. is still underway, to complete all of the wave -iv- triangle. 

Wave .e. cannot rally above the wave .c. high of 2.96, for this current triangle formation to remain valid.

A break of 2.71 now, would suggest t that our wave –iv- triangle ended at 2.87

EURO

As mentioned a week ago, the euro has built a sizable inverse head and shoulders bottom pattern.  That’s bullish, and could serve as the “launching pad” to launch the euro into its C/3 wave.

A move above the neckline area could usher in a big rally in gold and GDX, and Greece is likely the catalyst.  Greece is the weakest member of the EU, and if it leaves, it could cause the euro to surge.

HUI/GDX

This market continues to be very weak, even though it is now oversold. Depending what happens with gold, the USDX, and the euro today, we may, unfortunately, exit our long positions.

If we do, we will advise subscribers via an Intraday Post.  A break below the wave (a) low of 17.29 highlighted with a red circle on the chart, would eliminate our current wave b triangle option.

We are long, risking all positions to 17.28!

SUNCOR

We will be adding to our short Suncor position at 26.00, and will then lower our stop.

We are short Suncor, risking to 33.50, but will be adding to our short positions at 26.00.

CLAUDE RESOURCES

Claude is our “in-house” proxy for the C wave that we hope envelops the entire precious metals sector.  We were decent buyers in the 15 - 20 cent area, and have traded it a number of times. 

This is another look at Claude, via the daily chart.  Most gold stocks have not performed like Claude.  The company’s motto is "Discover, Develop & Deliver", and it’s living up to it.

Regardless of what happens with gold, great gold stocks can do well, and Claude is a great example of that!

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Email: [email protected]

Website: www.captainewave.com

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