Technical Analysis Of Major Markets

GOLD

Markets are very quiet ahead of the FOMC decision.

Gold dipped to 1101.50 in the overnight session, before recovering.

We indicated in yesterday's End of Day that we were NOT sure that the correction from the 1108.80 high was complete at the 1102.60 low.

The 61.8% retracement of the bigger rally from 1097.80 to 1108.80 is 1102.00.

With all Ewave analysis considered, we believe gold should start to rally higher form here in wave .iii.

Once we confirm that all of wave .ii. is complete at the 1097.80 low, we will provide our key projections for the end of wave .iii. 

Our current wave .ii. count looks like:  

*a* = 1117.00;

*b* = 1147.30;

*c* = 1097.80, to complete all of wave .ii.  

We are long 20 positions, risking to 1072!  

CRUDE OIL

Crude was basically unchanged in the overnight session.

In our last End of Day Post we talked about a potential triangle in the wave ^b^ of *ii* position.

If that analysis is correct, then the current rally in crude would be wave !e! of that triangle formation.

Our current analysis of wave *ii* looks like: 

^a^ = 43.21;

^b^ triangle:

!a! = 48.42;

!b! = 43.39;

!c! = 46.04;

!d! = 43.60, if complete;

!e! rally to complete all of the wave ^b^ triangle.

Wave !e! cannot rally above the wave !c! high of 46.04, for this triangle option to remain valid.

^c^ drop to go, to at least the wave ^a^ low of 43.21.

Our wave *ii* retracement levels are:

50% = 43.53;

61.8% = 42.17.

We plan to go long 8 positions at 42.50, and buy 42.00 puts, as stops!                                                                                        

S&P500

The S&P Futures are up about 1.5 points at the time that this Post was being written. 

We still appear to be working on the internal corrective wave structure of wave .d..

As the attached 120 Min Chart indicates, we could be working on the following internal wave structure for wave .d.:

*a* = 1937.19;

*b* triangle rally is now;

*c* drop to complete all of wave .d.              

Wave .d. cannot drop below the wave .b. low of 1911.21, for this triangle formation to remain valid.

Upon completion of the wave -iv- triangle, we should expect a very sharp thrust lower in the S&P. 

That has a minimum target of the wave -iii- low 1867.01.

We plan the take profits at the end of wave -v-, as this final drop should complete an initial impulsive sequence that started at the major top of 2132.82.                           

We are short 10 positions, with 1975 calls!

USDX

Like the S&P, the USDX was also pretty much unchanged in the overnight session.

Our updated count is:

.i. = 93.17;

.ii. = 98.41;

.iii.:

*i* = 92.54;

*ii* = 96.59, if complete. The 78.6% retracement of wave *ii* is 97.15. 

*iii*:

^i^ = 95.73;

^ii^ = 96.42;

^iii^ = 95.11;

^iv^ = 95.62, if complete; Wave ^iv^ could also be becoming a bearish triangle.

^v^ drop to go.

We still expect the USDX to continue to move lower.

We are short 5 positions, risking to 98.42!

NATGAS

NG moved higher in the overnight session reaching 2.791, at the time that this Post was being written. 

We are thinking that this current rally is part of a wave ^c^ diagonal triangle.

For this analysis to remain valid, we would not want NG to rally very much higher, as the shape of the diagonal triangle would start make us question whether it is the correct interpretation of what this market is doing.

For the time being we will maintain our current analysis position, but NG needs to turn down very soon.  It needs to turn down also, so we can buy our long positions.  We are expecting a dramatic move to the upside once the triangle is resolved.  This should help the CRB index move higher, and that’s good news for gold!

Our current count for the beginning of our second wave b is:

-i- or -a- = 3.11;

-ii- or -b- = 2.56;

-iii- or -c-:

.i = 2.96;

.ii.  is still underway, and we need to see one more drop to the 2.62 low to complete all of wave .ii. 

Buy 5 positions at 2.61, risking to 2.47!

EURO

The euro continues to carve out the inverse H&S bottom pattern that we believe will launch the massive C wave to the upside.  That’s more good news for gold! 

FXI

We believe the Chinese stock market has considerable downside.  This should also move money into gold as the rally in the stock market fails.

HUI/GDX

The HUI index has yet to break out of its downtrend channel and begin its dramatic C wave to the upside.  We believe that event is coming very soon, and so:

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

CLAUDE RESOURCES

Claude is our bell weather gold stock.  With superb management, the inverse H&S bottom pattern that we highlighted a week ago is fully intact, and ready for an upside breakout that should launch a dramatic C wave advance, ultimately to new highs.  Patience is required, and it will be rewarded!

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Email: [email protected]

Website: www.captainewave.com

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