Hello MarketClub members everywhere. It has been an interesting week, to say the least. The sharp drop in gold caught many traders off guard, but not MarketClub members who were warned based on the Trade Triangles and my video on Wednesday that the sidelines were the best position to have at the moment.
The question is, should you buy gold now? The answer will be if you are long-term trader it may be a good time to be a buyer, if, on the other hand, you are an intermediate or shorter-term trader it would be best to wait until a green weekly Trade Triangle triggers to be a buyer of gold.
The next question is, should you be buying equities?
Let's begin by looking at the major indices and see what they're doing trend wise.
DOW (INDEX:DJI): This index is basically flat for the week. However, the Trade Triangles remain positive and the trend continues on the upside. This would be a hold unless something dramatic happens today or next week.
S&P 500 (CME:SP500): Much like the DOW the S&P 500 is flat for the week but remains in a positive trend with higher target levels. Unless something dramatic happens today, you should be holding long positions going into the weekend.
NASDAQ (NASDAQ:COMP): The NASDAQ is slightly higher for the week and remains in the confines of a general uptrend as defined by our Trade Triangles. I continue to like the long side of this market.
Crude Oil (NYMEX:CL.V16.E): This week has seen some profit taking. However, the general trend in this market is positive. a new daily Trade Triangle kicked in today indicating a move back into oil on the long side.
Gold (FOREX:XAUUSDO): The gold market continues to be on the defensive with the RSI below its 50 line. Both the weekly and daily Trade Triangles are red indicating a sidelines position. Only the monthly Trade Triangle is green indicating that the longer-term trend for gold remains positive albeit sideways at the moment.
Alert: Remember markets can change quite dramatically especially in the waning days of summer when the markets are quite thinly traded. Always have areas in your mind that if the market penetrates those levels you will exit your position. This is called discipline and over the long term it will save you and make you money.
Enjoy the final weekend of August everyone - Labor Day is fast approaching.
Stay focused and disciplined.
Every success with MarketClub,
Adam Hewison
President, INO.com
Co-Creator, MarketClub
My prediction between 8/27 and 9/21, the next Fed meeting. Both gold and equities could have a brutal sell-off to end August. The GLD could sink to the low 120s and the S&P may fall to the low 2,100s. A bounce may occur before the Labor Day Weekend. After Labor Day Weekend rather than expecting traders to come back from summer vacation and be in sell mode it wouldn't surprise me that they do some buying as both markets try to bounce back particularly with the next jobs report. I think volatility will take a pause for a week or two. The GLD should hold in the mid 120s and the S&P could bounce back to the 2,150 to 2,160 area. I believe the markets will play a wait and see game until the week of 9/19 and that's when volatility will pick up again. And from that Fed meeting we'll find out for sure which direction markets will take going forward.