Technical Analysis Of The Markets

Gold

At the time that this was being written, Gold reached a new low of 1128.70 in the overnight session. Gold is very oversold and is now likely heading to our 78.6% retracement level of wave ^i^ which is 1122.70.

We are also starting to consider the possibility that wave -ii- has become much more complex and is still underway. In this case, this alternate count would look like:

-i- = 1169.80;

-ii-:

.a. =1097.70;

.b. = 1191.80;

.c. drop is now with a minimum target of 1097.80. 

This type of correction would be considered an irregular, where wave .b. exceeded the start of the move, which is this case would be the wave -i- high of 1169.80. 

For now our preferred count remains as: 

*i* = 1156.40;

*ii* = 1103.80;

*iii*:

^i^ = 1191.50;

^ii^ = 1129.80, if complete;

^iii^ rally is next. 

 Our projections for the end of wave *iii* remain unchanged as: 

*iii* = 1.618*i* = 1198.80;

*iii* = 2.618*i* = 1257.50. This is our preferred target.

When we are sure that wave ^ii^ is complete we will provide projections for the end of wave ^iii^. Gold is very oversold at the moment.

We are long 20 positions, risking to 1103.00!

Crude

We have been working on the assumption that all of wave ^i^ of *ii* ended at 47.03, and that the current sideways trading is all part of our expected wave ^ii^ correction.

Our current low, since the wave ^i^ high of 47.03 was made, is 45.58. This low is a bit short of our 50% retracement level of 44.82, so we doubt that all of wave ^i^ would be complete at this level, but it is possible, and crude is up nicely today!

Completed wave patterns all trump retracements in EWave analysis. Our expected retracement levels for wave ^i^ are:

50% = 44.82

61.8% = 44.29.

What is clear on the Intraday Chart, is that from the 47.03 high, we have lots of overlapping waves, which supports our idea that wave ^ii^ is likely underway, but from the 46.22 high, we have what appears to be a very larger bullish triangle developing, that may have ended at the overnight session low of 45.97.

If this is the case, then wave ^i^ did NOT end at 47.03, and we should expect a sharp thrust higher to then end wave ^i^.

For the time being our preferred analysis will remain with the idea that all of wave ^i^ ended at 47.03 and that the current back and forth trading is all part of wave ^ii^. Our trading strategy will remain unchanged.

A sharp break of the 47.03 high, now, would confirm that wave ^i^ is still underway and we will then modify our trading strategy and retracement levels for wave ^ii^ accordingly.  

Our first target for the end wave *iii* is: 

-iii- = 1.618-i- = 61.32.            

Crude did rally to a high of 46.72, but we believe that rally is part of an ongoing wave ^ii^ correction.

We are long 10 positions at 43.20, with 42.00 puts, as stops, and plan add 3 more at 44.50!

Suncor

Suncor is a key lead indicator for the oil stocks sector, using Ewave analysis.  A rally just to our d wave target high in the $40 area, is about a 30% gain from here!

We see the stock rallying 100% before the “meat and potatoes” of the up cycle fades!

S&P500

The S&P Futures are down about 5 points in the overnight session, at the time that this Post was being written. The retracement of wave (ii) is very deep, and it appears likely that the S&P is going to all time new highs, although we do NOT have a count to support this.

The S&P would have to turndown NOW, for there to be any hope that our current bearish wave (ii) analysis still remains valid.  

We are flat this market!

USDX

The USDX rallied to 97.29, in the overnight session, at the time that this Post was being written. Our current count continues to suggest that we are falling in wave *d* of our never ending wave .b. triangle!

As we have mentioned in previous Posts the other Option is that all of wave -iv- ended at 92.54 and we are now rallying in wave -v- to at least the 100.71 high. Our current wave .b. triangle option will remain valid as long as wave *c* does not rally above the wave *a* high of 98.41.

Our wave -iv- count is very complex and looks like:

.a.:

*a* = 94.88;

*b* = 100.26;

*c* = 93.17, to complete all of wave .a..

.b. triangle:

*a* = 98.41

*b* = 92.54;

*c*:

!a! = 96.88;

!b! = 93.83;

!c! = 97.89, if complete, to complete all of wave *c*.;

*d* is underway, to be followed by a wave *e* rally to complete all of our wave .b. triangle.

NG

NG was stable in the overnight session.  If wave (iii) is complete at the 1.95 low, then we should now be moving higher in wave (iv). We are just waiting for further confirmation.

Our retracement levels for wave (iv) are:

23.6% = 2.64;

38.2% = 3.08

We are flat this market, but looking for a big turn higher soon!

HUI/GDX

We are looking for a low in wave .ii. of -iii-. This is our preferred count. We will provide projections for the of wave .ii., when we are sure that wave .ii. is complete.               

At the moment we have a 3 wave rally in place from 12.62 to 17.04. If gold follows our more complex wave –ii- analysis that we mentioned above, we unfortunately cannot rule the possibility that the GDX is now heading back to the 12.62 low.

Our updated count is:

-i- = 14.71;

-ii- = 13.19;

-iii-:

.i. = 17.04;

.ii.:

*a* = 15.61;

*b* = 16.81;

*c* = 14.63, if complete to complete all of wave .ii.;

.iii. rally is next. 

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

********

Captain Ewave & Crew!

Email: [email protected]

Website: www.captainewave.com

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