GDX, UCO, XLE update 1/18/2016

GDX: it’s getting closer and closer to our ideal buy zone of around $10. After that we expect it to run to $30-$40 long term, but it will likely first target $20, then $15, followed by $30. But that’s a looooong time from now, and let’s first focus on finding that bottom and nailing the 1st/a wave up to what we think will be the $20 area. Please note the falling wedge, in place since 2013, and which starts also at around $30… Often wedge are retraced to their origin 🙂 GDX daily

 

UCO: Let’s first take bigger picture view and we can see how price has fallen from it’s $540 ATH (!) to it’s current level in ugly overlapping waves. Only the last wave since green “b/2” is a clear impulse (counts as 5 waves).uco 1

If we zoom in, starting at “b/2”, which we prefer to count as a b-wave as 5 waves down will likely target 0 or – values… we can from that high count clearly 5-waves down. There are in our opinion 2 possible ways to count the waves down (“alt” shows alternate count), but both end up the same: price is now in micro 5 of minute v of minor c. Please note the falling wedge pattern. Break out targets often the start of the wedge: $54ish. Now if this will be 5 waves, then that would likely be the 4th wave, with the 5th wave making one more lower low below current prices.uco 2

 

XLE: Not too much to add compared to the prior update, but the fact that the price action appears to be done, with clean and clear 5 minor waves down to the 2.382x extension, and with wave 2 being 62% and wave 3 being 161.8% of wave 1. AND the current price low also where major c=a (100% yellow extension, $53) All text book in our opinion. The weekly TI chart shows positive divergence between the current low and the august low made in 2015, possible setting up for the first rally in a long time.

xle