Ewave Analysis Of Major Markets

GOLD

Gold reached a low of 1150.10, in yesterday's day session before recovering to almost unchanged on the day.

Our best bullish count remains that a major low is in at 11462.20 and that we are starting higher in either wave -d- or wave -iii-.

However, until we break above the upper downtrend line of the wave .c. diagonal triangle that is connecting 1187.30 and 1174.40, it is still possible that we are going to revisit the 1146.20 low one more time.

Until this happens we can only assume that this wave .c. diagonal triangle is still NOT complete at the 1146.20 low.

If wave -c- or -ii- did end at 1146.20, then the bullish count we have is:

^i^ = 1163.70;

^ii^ = 1150.10, if complete;

^iii^ rally is next. 

We note that gold now has a record spec short position, which we suggest is signaling that a major low is in the making!

No change to our current 5 long positions, with 1150 puts, but will add 5 long positions at 1165!

CRUDE OIL

Well, they got the Iranian deal, although whether it ever gets approved by the US Congress is another matter for another day.

In the overnight session crude dropped to a low of 50.89, before moving higher, now trading above 52.00, at the time that this Post was being written. We see no reason to change to our current outlook, with our second wave .x. ending at 50.58.

We are likely now rallying in our third wave .a. We need a break above the 53.81 high to give us a little more confidence that the 50.58 low is really the end of our second wave .x.

The other option is that we are going to see one more dip below 50.58 to complete wave .x., before we move higher in our third .a., .b., .c. pattern. 

From our wave -iii- low of 44.20, our current wave -iv- rally looks like:

.a. = 51.20;

.b. = 43.58;

.c. = 54.24;

.x. = 42.11;

.a. = 52.48;

.b. = 47.05

.c. = 62.58

.x.:

*a* = 58.14

*b* triangle = 61.57;

*c* = 50.58, if complete. Our *c*=2.618*a* projection is 49.95.

Our third .a. rally is now underway.

We are long 5 positions, with 50.00 puts!

S&P500

 

The attached 10 Min and 120 Min S&P Charts provide the details of our scenario. 

 

The bottom line:

All the elements are now in place for a completed wave .ii. as the S&P rallied sharply today is what we believe to be is all or most of wave .ii.

We reached a high yesterday 0f 2100.67, which is within our 50 to 61.8% retracement zone for wave .ii. We added to our short positions at 2097! 

Our target zone for the end of wave *c* and all of wave *ii* remains as: 

50% = 2093.26;

61.8% = 2101.90.

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. A break of 1980.96, would eliminate this possibility. 

We expect the S&P to now turn sharply lower in wave .ii. as we suspect that the Greek Communists will not approve the Euro “deal”. 

We are short 3 positions at 2115, and 5 at 2070, 3 at 2097, risking all to 2130!

USDX

The USDX reached 97.20 in the overnight session, before turning lower. We would expect that if our current analysis is correct, and wave *c* of our wave .b. triangle ended at 97.44, then we need to turn lower now.

Otherwise it might be possible that our wave .b. triangle is expanding and wave *c* is not complete at the 97.44 high.

Our current count within wave -iv- is as follows:

.a.:

*a* = 94.88;

*b* = 100.27;

*c*  = 93.16, to complete all of wave *a*;

.b. triangle:

*a* = 98.00;

*b* = 93.30;

*c* = 97.44, if complete:.

*d* drop is now;

*e* to go to complete all of the wave *b* triangle.

.c. drop to go, to least the wave .a. low of 93.16, to complete all of wave -iv- 

Wave *d* cannot drop below the wave ^b^ high of 93.30, for this triangle formation to remain valid.

NATGAS

NG moved a little higher in the overnight session, reaching 2.89, at the time that this Post was being written.

Our minimum target for end of this current rally is the wave ^a^ high of 2.96, but we do have a projection that suggests a run to the 3.04 level, before all of wave .c. ends. 

Our current wave -iv- triangle count looks like:

.a.= 3.11;

.b. = 2.56;

.c.:

^a^ = 2.96;

^b^ = 2.64;

^c^ rally is now to at least the wave ^a^ high of 2.96. A projections for ^c^ is: ^c^ = ^a^ = 3.04.

.d. and .e. to go to complete all of this wave -iv- triangle.

HUI/GDX

The GDX has continued to drift lower, reaching one marginal low after another.  The final bottom in wave b is likely near!

We are very long the GDX, risking to 16.00!

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Special Offer For Ewave Riders:  We are doing a special free post this week-end on gold stocks.  Send us an email to [email protected] and we’ll send you the report, which includes key Ewave analysis of stocks like Kinross and Claude Resources, as well as the HUI index!

Email: [email protected]

Website: www.captainewave.com

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