Technical Analysis Of Major Markets

Gold

Gold reached a high of 1074.00 in the overnight session.  We are starting to lean to the idea that wave .a. ended at 1151.60 and that we have now started our wave .b. rally.

If gold were to now rally to the 1181.00 area, which is roughly the location of our wave *iv* triangle high, then we would be pretty sure in saying that we are now in at least our wave .b. rally.

The other option is that all of wave 4 or wave ii of 3 is complete at the 1151.60 low and gold is now heading higher for many years to come.   

Our current Options have been revised to suggest that wave .a. is likely complete at the 1151.60 low.

Option 1: Wave .a. of -v- is now complete at the 1051.60 low;

Option 2: Wave 4 or wave ii of 3 is complete at the 1051.60 low and gold is heading to the moon. Our wave 4 Option will be eliminated if we drop below 1033.00, which is the top of wave 1. 

If it’s Option 1, then wave .b is expected to rally between 50 to 61.8% of the entire wave .a. drop. We will wait one more day before we provide those retracement levels, to be sure that all of wave .a. is complete at the 1151.60 high.

For wave .a. to be complete we will need wave .iii. in the USDX to be pretty much complete also.

We are long 20 positions, with puts at 1085.00!

Crude Oil

 

Crude continues to tease the bulls, as we reached a high of 42.18 in the overnight session, and then gave most of it back at the time that this Post was being written.

on the Intraday Chart the drop from 43.45 to 41.53 is now an incomplete double 3 wave drop. Our minimum target for the second 3 wave drop is the 41.51 low. 

The trading patterns from the 40.42 low to the 43.45 high, still remain unclear, and we cannot rule the possibility that wave .ii. did not end at 40.42, as that this corrective wave may become more complex.

For now, we will assume that our current count is valid as follows:

.i. = 42.37;

.ii.:

*a* = 41.26;

*b* = 42.73;

*c* = 40.42, to complete all of wave .ii.. Our 78.6% retracement of the entire wave .i. rally is 40.44.

.iii. rally is now, and could be subdividing.

A rally now above the 43.45 high would be helpful for the above count to remain valid.

We are long 15 positions, with 42.00 puts, as stops!                                                                               

S&P500

 

The S&P Futures were higher in the overnight session by about 8 points at the time that this Post was being written. We are still expecting one more push above the 2097.06 high to complete wave *v* and all of wave .a..

After wave .a. ends we should expect to see a corrective wave .b. setback that will then be followed by a wave .c. rally that should take this market to all time new highs. We expect that should stay within the current boundaries (red trend lines) of our wave (v) ending diagonal.

Here’s a look at our long term Ewave for the SP500.  Things don’t look very good, to put it mildly:

We recommend getting positioned in gold stocks now, rather than SP500 stocks.

We are flat the SP500, with no positions!

USDX

The USDX was weaker in the overnight session, reaching a low of 99.85. On the Intraday Chart, we are still trading within the bounds of our ending diagonal triangle, so we cannot rule out the possibility that this diagonal triangle is going to extend, and rally above the 100.35 high at least one more time.

We cannot say for sure that wave .iii. is complete at the 100.35 high, based on the trading patterns within the drop to 99.85. As we have said in previous posts, since we are in an ending diagonal triangle we expect that wave .iii., when it ends will be obvious, as we should see a sharp dip lower, to announce the beginning of wave .iv..

We expect the wave .iv. correction to retrace between 23.6 and 38.2% of the entire wave .iii. rally.  

When wave .iii. does end we will provide the retracement levels, for wave .iv..

All of our current wave -v- looks like:

.i. = 96.64

.ii. = 93.83

.iii. = 100.35, if complete

.iv. drop is now, or next.

We expect that wave .iv. should take a number of weeks to develop.

We are flat the USDX, with no positions! 

NG

 

NG was stable in the overnight session.  On the Intraday Chart the rally from 2.178 to 2.249 looks corrective, which suggest to us that NG is heading back to the 2.178 low again, after this corrective rally is complete, if it is not already at the 2.2249 high.

The idea that our wave .iv. triangle could be extending, also remains valid. Only a break of the 2.41 wave .iv. high now, would suggest that wave (iii) has already ended at the 1.95 low, and that wave (iv) rally is now underway.

We are flat natgas! 

HUI/GDX

 

No changes, but if wave .b. is now underway then the GDX will rally with it, and we will need to wait for our new low below 12.62, when we get our wave .c. drop in gold.

The price action of these two senior producers, in the face of lower lows for bullion, is very encouraging indeed.  Our projected new low for GDX is expected to be very shallow in both price and time.

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

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Website: www.captainewave.com

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