US Rates
The Captain’s long-term US Rates Chart.
US 10 Year Bond Yield:
The daily chart.
Analysis:
The 10 Year US Bond Yield was lower this past week, reaching a low of 4.238%, closing at 4.558%.
Within a multi-year wave C, we are rallying in wave i, which is now still underway.
Within wave i, we completed wave (i) at 1.266%, wave (ii) at 0.504%, wave (iii) at 4.997% and our large wave (iv) bullish triangle at the 3.947% low.
We are moving higher in a subdividing wave (v) to complete all of wave i and therefore expect higher yields in the months ahead. Within wave (v) we have the following internal count:
-i- = 4.161%.
-ii- = 3.956%.
-iii-:
*i* = 4.487%
*ii* = 4.226%
*iii* is now underway.
After wave i ends we expect a wave ii, correction that retraces between 50 to 61.8% of the entire wave i rally.
On our Long-Term Monthly Chart all of wave A ended at the 15.83 high in 1981 and since that high was made, we have fallen in a triple 3 wave correction within wave B that ended at the 0.38% level.
We are moving higher in a multi-year wave C, and that will eventually see rates reach at least the 15.83 high again.
Active Positions: Long, risking to 3.880%!
Oil
The daily chart.
Analysis:
Wave i ended at the 126.42 high and wave ii correction at the 54.89 low.
We are now moving higher in wave iii, and within wave iii, we completed wave (i) at the 119.43 high, and we are now falling in wave (ii), which has a last retracement level of:
78.6% = 68.70.
Within wave (ii), we completed wave -a- of (ii), at 76.73, and we are getting close to completing a wave -b- bearish triangle formation, with an internal wave structure as described below:
!a! = 117.63.
!b! = 80.56.
!c! = 110.90.
!d! = 88.66.
!e! triangle:
^a^ = 106.00.
^b^ = 98.60.
^c^ = 105.21.
^d^ = 100.75.
^e^ = 102.80, to complete all of our wave -b- bearish triangle.
After our wave -b- bearish triangle ends we expect a very sharp drop back to at least the wave -a- low of 76.73, to complete all of wave (ii).
Trading Recommendation: Long crude with a put as a stop. Long Suncor.
Active Positions: Long crude with puts as a stop! Long Suncor!
Gold
The Captain’s weekly gold chart.
The daily chart.
Analysis:
Gold was initially lower again this past week reaching a low of 4500.90, although after that low was made, we moved higher reaching a high of 4765.20, closing at 4714.90.
Our current long-term gold count starting from the 35.20 low made back in 1971, which remains incomplete, is as follows:
1 = 1920.80.
2 = 1046.20.
3:
i = 2073.40.
ii = 1614.40.
iii:
(i) = 2073.30.
(ii) = 1810.10.
(iii):
-i- = 2790.40.
-ii- = 2539.90.
-iii- = 3500.30.
-iv- triangle = 3363.60.
-v- = 5595.40, to complete all of wave (iii).
(iv):
-a-:
*a*= 4404.10.
*b* = 5419.30.
*c* = 4098.80, to complete all of wave -a- of (iv).
-b-:
*a* = 4602.60.
*b* bullish triangle is still underway.
*c* rally above wave *b* ends.
A very powerful wave (iii) of iii is now complete at the 5595.40 high and we now falling in a multi-month wave (iv), correction that has the following retracement levels:
23.6% = 4702.00
38.2% = 4149.40.
Within wave (iv), we still believe it is going to take some time for it to be complete, so we are suggesting that only wave -a- of (iv) ended at 4098.80 and if that is the case than we are moving higher in wave -b-. Since wave -a- was a three-wave pattern then we expect wave -b- to rally back to at least near the all-time high or perhaps even exceed it before it ends.
If wave (iv) becomes a flat or irregular type correction than after wave -b- ends we expect a wave -c- drop back to at least the wave -a- low of 4098.80 before all of wave (iv) ends. If wave (iv) becomes a large bullish triangle then it will consist of 5 legs, and we will NOT return to the wave -a- low, before all of wave (iv) ends.
Within wave -b-, we likely completed wave *a* at 4602.60 and are working on a bullish triangle wave *b* formation that remains incomplete. After wave *b8 ends we expect a thrust higher in wave *c* to complete all of wave -b-.
In all cases, we should expect gold to move higher in wave -b- over the next couple of weeks. Wave -b- must consist of at least 1 three wave pattern, but it could have up to 3 such patterns, separated by a wave *x*.
Projections for the end of wave 3 are:
3 = 2.618(1) = 5936.00.
3 = 4.236(1) = 9033.60.
Active Positions: Flat!
Thank-you!
Captain Ewave & Crew
Read the full article here