Technical Analysis Of Major Markets

Gold

Gold did not move very much in the overnight session, perhaps due to today’s option expiry.

The good news is that we are encouraged by the fact that we seem to have an impulsive wave structure from 1076.60 low to the current highs!

The exact structure of the impulsive pattern is not 100% clear, but we have a couple of options, which could affect the short term direction in gold. 

The first Option is that we have a completed impulsive structure from 1076.60 to 1104.90 and either all of the corrective setback is complete at 1088.40, or we are going to revisit that area one more time to complete that setback.

It is also possible that all of the corrective setback is complete at the 1088.40 low and we are moving higher. Our setback retracement zone is:

50% = 1090.60;

61.8% = 1087.20.

The second Option is a little more complex and look like: (Note that the labelling is for illustration purposes only): 

i = 1100.90;

ii:

(a) = 1094.20;

(b) = 1104.90;

(c) = 1088.40, to complete all of wave ii. Note the 50% retracement level is 1088.80.

iii:

(i) = 1101.70;

(ii) = 1091.20, if complete to complete wave (ii).

If this option is correct, we should expect gold to move sharply higher in wave (iii) of iii.

In either case we need a break of the 1104.90 high. On the 60 Min Intraday Chart gold has a head and shoulder bottom, with he right shoulder now complete at the 1091.20 low.

The neckline connects 1103.60 and 1104.90.

We are long 5 positions, with 1100 puts, 5 long positions, with 1150 puts, and plan to buy 5 more positons at 1105.00, with 1100 puts!

CRUDE OIL

Crude reached a new low of 46.70 in the overnight session, before moving higher. We are probably due for a corrective rally, but we still expecting this market to drop further towards our 44.75 wave *iii* projection.

Upon completion of wave *iii* of -iv- we will rally in wave *iv* and then drop to a final low in wave *v* to complete all of wave -v-, (c) and b. Crude is probably setting itself up for one of those “capitulation moments”.            

S&P500

The S&P Futures rallied in the overnight session, by about 10 points. As we mentioned in yesterday's End of Day Post this market is now at the crossroads:

1.0          If wave .b. is about to end at the 78.6% retracement level then we should expect an impulsive type rally in wave .c. to take the market back to the 2134.72 wave -iii- high, or;

2.0               The rally is going to be corrective and we should expect a retracement between 50 to 61.8% of the drop from 2132.82 to 2063.

Should the S&P fail to hold this level then we would need to seriously consider the fact the all of wave -v- , (v) and b ended at 2132.82, as a failure high.

The wave -iii- high was 2134.72. As a minimum, we should expect to see at least a corrective rally begin very soon as we have dropped about 70 points, almost in a straight line.  

So, this expected rally should give us the clue we need about whether a major top is in at 2132.82.  

 

We note that the Dow broke below its wave -iv- low in yesterday's trading. That low in the S&P is 2044.06. A major top in the S&P may have occurred at 2132.82! Let' see what form this rally takes in the S&P!

USDX

 

The USDX reached a high of 97.07 in the overnight session, as this Post was being written. This rally is likely another subdivision of wave ^iii^, and we still see lower prices ahead. 

Our current count from the wave ii high of 100.27 looks like:

-i-  = 93.27;

-ii-:

.a. = 95.94;

.b. = 94.89;

.c. = 97.87;

.x. = 93.71;

.a. = 96.69;

.b. triangle = 96.36;

.c. diagonal triangle = 98.30, to complete all of wave -ii-.

-iii-:

.i. = 97.32;

.ii. = 97.72;

.iii.:

^i^ = 96.97;

^ii^ = 97.65;

^iii^ drop is now.

We do have a projection for the end of wave -iii- at 86.81.

We are short 5 positions, risking to 97.73!

NATGAS

We are working on the assumption that our second wave ^b^ ended at 2.7385 and we are now rallying in our second wave ^c^. In the overnight session we reached a high of 2.8194.

Our minimum target for the end of our second wave ^c^ is 2.96.

We should expect higher prices in our second wave ^c^ as the next big event.   

Our current wave -iv- triangle count looks like:

.a.= 3.11;

.b. = 2.56;

.c.:

^a^ = 2.92;

^b^ = 2.44;

^c^= 2.96;

^x^ = 2.64;

^a^ = 2.93;

^b^ = 2.7385;

^c^ rally to at least the 2.96 high, to complete all of wave .c.

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

HUI/GDX

We wait for gold to start moving higher, to activate the C wave higher for gold stocks! 

CLAUDE RESOURCES

BARRICK GOLD

We are long the GDX, ABX, NEM, CRJ, and TSX:XGD… with no stops!!!

********  !

Email: [email protected]

Website: www.captainewave.com

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