Thursday, May 30, 2013
The etf to play it will be GDX. It should now be safe to buy any and all pullbacks in this sector. By the end of the year gold/silver miners could be up 40-50%. I am not as constructive on physical gold and expect any moves higher to be somewhat muted.
Tuesday, May 28, 2013
Friday, May 24, 2013
Thursday, May 16, 2013
The sheer number of bullish money managers that are being interviewed by the financial media on a daily basis seems to have reached an apex. Just like the unsuspecting woman in the picture above, the market is in a perilous situation. While I have been very bearish (and wrong...for now) for the rise of the last 100+ SPX points, there is no doubt in my mind that the coming sell off will easily put short positions "in the money" on anything sold short at 1550 and higher. The big question is when, not if the market will correct lower. Considering the rare and strange readings throughout many volatility and breadth indicators that I review on a daily basis, I am left with only one conclusion. When the market breaks lower it will probably be unusually powerful and very similar to the moves lower in 2010 and 2011. Perhaps, a combination will emerge, like some kind of mutant offspring . I believe this because I am seeing many of the same type of readings throughout a plethora of data that I review on a regular basis. However, for the sake of time, I will publish the charts that I think display the overhead resistance that the market has been steadily pushing up to.
The final chart is of the SPX divided by the US Dollar index. While the market has been hitting new highs, this chart has not been in agreement. This divergence will be one of the catalysts that can be attributed to the coming plunge.
As of today, I don't think the intermediate term top will be formed until late May or the 1st week of June but I also don't think there is any upside past 1664-1670 on the SPX. Therefore, I expect volatility to increase over the coming days and we could see a couple moves down towards 1580 only to rebound back to 1650-1670 a few days later.
Wednesday, May 15, 2013
Sunday, May 12, 2013
The market is coming closer to some sort of top. It might only last a month but the ensuing sell off should be frightening. The minimum target I have for the correction is 1500 on the S&P. However, it could be as low as the 1420-1440 area. The following price structure does not allow for much more upside. I mentioned the other day how we could see a false breakout to the upside above the upper channel line but it should fail just like the false breakdown that occurred 3 weeks ago. Regardless, an intermediate term top is now upon us and very little upside can be achieved until the market trades down to 1500.
Wednesday, May 8, 2013
I expect a high over the next few days of around 1640, probably after a 15-20 point pull back. Price is now back to the top range of the structure that has contained the SPX over the last few months.