Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your 1 p.m. market update for Wednesday, the 24th of August.
Yesterday we posed the questions: Has the Gold and Silver market topped out? And have we seen the bottom in the Equity markets?
Today, Gold and Silver confirmed that they have topped out for the time being. The Equity markets are another story, and I'm not quite sure that we have seen a bottom put in place for those markets.
Be sure to catch tomorrow morning's post! Most markets go through seven distinguishable steps and it would appear that Gold has met all those criteria. This post will be invaluable, in my opinion, for any serious trader. I think you'll find it very timely and interesting. You should make yourself aware of these seven steps so you can recognize them in the future.
Now, let's go to the 6 major markets we track every day and see how we can create and maintain your wealth in 2011.
S&P 500
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = - 75
Today the S&P 500 hit the 61.8% Fibonacci retracement of 1175. The high for the S&P so far today was 1175.23. We expect that level to hold and believe the S&P 500 will once again challenge the lows. We are still viewing this market in a longer-term bear trend.
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SILVER (SPOT)
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trend = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = + 75
We warned traders yesterday that the market action in silver was not positive, with two negative Japanese candlesticks forming that typically point to some type of a reversal. The Doji line that occurred on Monday and yesterday's bearish or negative engulfing line both create a bearish type scenario for silver. Overall it would appear as though the silver market has, for the time being, topped out.
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GOLD (SPOT)
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = + 75
Yesterday's negative market action set the tone for the gold market today. The Japanese candlestick negative (bearish) engulfing line will be confirmed with a lower close today. Long Term, intermediate term traders should stay disciplined and hold onto long positions and protect profits with money management stops. Short-term traders should now be on the sidelines and waiting for a new long entry point.
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CRUDE OIL (OCTOBER)
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 85
Please note that our comments are based on the October contract. The crude oil market is now back in an area that should provide resistance. This is based on the 61.8% Fibonacci retracement level of 85.30. Currently the market is trading a little above that level, which is not totally unusual in volatile markets. Long Term and intermediate term traders should hang on for the ride and protect profits with money management stops. Short-term traders should be on the sidelines in this market. The longer term trend for crude oil is down based on our Trade Triangle technology.
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DOLLAR INDEX
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 60
Once again, the dollar index rallied from the support level of 73.50. This level continues to offer good support, as this index has remained in a fairly well defined trading range for the last several months. Resistance comes in around the 75 to 76 area. With a Chart Analysis Score of - 60 we would want to trade this market using our Donchian Trading Channels and Williams %R indicator. The index remains below its 200 day moving average, while our longer-term Trade Triangle remains positive.
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REUTERS/JEFFERIES CRB COMMODITY INDEX
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = - 55
I suspect that the rally we have seen in this market is probably going to be the high of the rally. While our bias is towards inflation, the index is currently indicating that we are in more of a deflationary scenario. Stay patient and wait for the Trade Triangles to signal when this market has made a trend change to the upside. Long Term and intermediate term traders hold your positions with money management stops. Short term traders should be out of the market at the present time.
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As always, we rely on our market proven Trade Triangle technology for catching the big moves.
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This is Adam Hewison for MarketClub and I'll see you tomorrow, right here at 1pm. Have a great trading day!
P.S. Don't miss our 5 P.M. show tonight! It's going to be a good one!
All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub
You're not stupid - your short will pay off. The current action is merely a "dead cat bounce". The S&P will go lower - probably the downward movement will resume when Bernanke's speech on Friday disappoints the market.
Gold will go up in the medium to long term. Until the U.S. achieves some semblance of fiscal balance, precious metals will continue to be a source of value. The present downward move is merely a short-term correction brought on by the recent parabolic rise in gold.
IT'S A MIRACLE!!!! Jesus came down and blessed the crippled economy, financial system, Wall Street, European and American banks and they ALL threw away their crutches and ran!!!!! Well, since I am really stupid, I bought more gold and platinum and, reading what Adam wrote, I believed, and agree with him and held my SPXU S&P short!
Thanks for the updates