Technical Analysis Of The Markets

Gold

Gold reached a low of 1123.90 in the overnight session, at the time that this Post was being written.

We are waiting for the end of wave *ii* to occur.

The 1123.90 low is now well within our retracement zones of:

50% = 1127.10;

61.8% = 1120.10

Once wave *ii* ends we should expect a sharp rally in wave *iii*. 

We will provide the projections for that rally, once we sure that wave *ii* is complete.

Our updated current count for all of wave .iii. is:

*i* = 1141.50;

*ii* = 1123.90, if complete;

*iii* rally is next.

Projections for the end of wave *iii* are: 

*iii* =  1.618*i* = 1191.40;

*iii* =  2.618 *i* = 1235.20.

The bull wedge pattern is intact on the long term chart.

We are long 20 positions, risking to 1097.00!

Crude Oil

Crude rallied to a high of 45.15, in the overnight session, at the time that this Post was being written.  We are still not sure whether wave !e! and all of wave ^b^ are complete at the 46.34 high.

Wave !e! could become a triangle in itself. 

If all of our wave ^b^ triangle ended at 46.34, then we are now heading lower in wave ^c^ of *ii*.  

Our current wave *ii* count looks like:

^a^ = 43.21;

^b^ triangle:

!a! = 48.42;

!b! = 43.36;

!c! = 47.71;

!d! = 43.73;

!e! = 46.34, if complete, to complete all of the wave ^b^ triangle.

Wave !e! cannot rally above the wave !c! high of 47.71, for this triangle formation to remain valid.

If wave ^b^ is complete at the 46.34 high then e! and all of the ^b^ ended at 46.34.

Our first projection for the end of wave ^c^ is:

^c^ = 0.618^a^ = 42.56.

We expect the end of wave ^c^ and all of wave *ii* would end within the following retracement levels:

50% = 43.54;

61.8% = 42.19.

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 8 points at the time that this Post was being written. We are now working on the assumption that we are falling in an incomplete wave .iii. of -v-.

We have made ourselves and our subscribers that took the trade, a “beyond ridiculous” amount of money shorting this market, from the area of the highs, and the long wait we had to endure for the drop has been worth it!  

Incredibly, the long term-drop we are forecasting could multiply our already-huge profits tenfold.

From an analysis standpoint, after a 50 point drop in the SP500, you would expect to see a small corrective rally, but we still see further downside in wave .iii.  

Our updated count for wave -v- is:

.i.:

*i* = 1953.45;

*ii* = 1979.64;

*iii* = 1929.22;

*iv* = 1949.52

*v* = 1908.92 to complete all of wave .i..

.ii. = 1952.89;

.iii. drop is now.

We have added an additional projection below. Projections for the end of wave .iii. are:

.iii.=.I. = 1840.95;

.iii. = 1.618.i. = 1771,80;

.iii. = 2.618.i. = 1659.80.

Here is a look at the longer term Ewave picture for the SP500:

Our very bearish case remains valid, but is our alternate at the moment.          

We are short 10 positions…and plan to add 5 more short positions at 1970.00, with 1975 calls!

USDX

We still do not have a great deal of confidence in our current thinking towards this market. Currently we are assuming that all of wave .ii. ended at 96.88, but the drop from 96.88 to 95.83 looks like a 3 wave corrective setback, which suggests that the 96.88 high is going to be challenged again.

The other option is that the USDX is now rallying in wave -v-, which will see it reach the 100.71, as a minimum. In the overnight session, the USDX reached a high of 96.29, at the time that this Post was being written.

NG

 

NG dropped to 2.629, in the overnight session, at the time that this Post was being written. On the Intraday Chart it looks like the drop from 2.72 to 2.629 is corrective, which suggests that we are going to rally back to the 2.72 level after this correction ends.

We will need to give this market a couple more days before we can start working on the internal labelling structure of wave -ii- or -b-. 

We will say that a drop back to the 2.526 low would not be a good sign for the bulls. 

Our current count, from the wave a low is:

-i- or -a- = 3.11;

-ii- or -b-= 2.526, if complete.

A break above the 2.79 high would confirm that this market is move significantly higher.

We are long 5 positions at 2.61, risking to 2.47!

HUI/GDX

We will likely see the GDX drop back to the 13.23 low to complete all of wave .ii., as we suggested in yesterday's End of Day Post.

The next big event in the market should be a sharp rally in wave .iii. 

Assuming that the 13.23 low is not challenged, our projections for end of wave .iii. remain unchanged:

.iii. = 1.618.i. = 16.61;

.iii. = 2.618.i. = 18.70;

.iii. = 4.236.i. = 22.08;

.iii. = 6.25.i. = 26.29.

Since the GDX is so undervalued compared to gold, we think that wave .iii. for the GDX could reach the 22.08 to 26.29 levels.

It is still not too late to add to existing gold stock and/or index positions on the long side.

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

CRB INDEX

The CRB index continues to act pretty well, with key components like oil, sugar, and wheat showcasing excellent bottoming action.  This is very good news for gold market investors. 

We use the CRB index as a key indicator of potential inflation, and our wave count for a coming C wave rise looks very solid!

CLAUDE RESOURCES

Claude is our bell weather gold stock, and it continues to perform like a champ.  It hasn’t been hammered like most gold stocks have, and it’s up about 100% in 2015! 

We feel that as most of the component companies in GDX and GDXJ are forced to get “lean and mean”, those ETFs will begin to look more like Claude does, on the price charts!  

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Email: [email protected]

Website: www.captainewave.com

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