They Just Rang A Bell On Gold and Gold Stocks

Our trading partner David A. Banister of Market Trend Forecast has been the go to guy on gold and precious metals. Let's check in with Banister and see if he thinks the bottom is in for gold.

As they say on Wall Street, “They don’t ring bells at the top” and for sure they usually don’t give you a phone call at the bottom either. Many heads have rolled trying to call this recent near 2 year downdraft in Gold in terms of bottom callers, me included. I thought we would never get much below 1440 or so from the 1923 highs, but alas we all know we did.

What makes me think that last week put in the final Gold low for the bear cycle? Too many things to mention, but based on the work I do enough to give me some chutzpah to make this call now. The 1180’s are very close to a classic ABC 61.8% Fibonacci retracement of the prior 34 month bull cycle. That cycle ran from October 2008 to August 2011 with a rally from $681 to $1900’s area. The most recent 21 plus month decline dropped right into the 61% pivot retracement of that entire move, and over a Fibonacci 21 month period as well! Human behavior does repeat over and over again, and as we all know in hindsight at the tops everyone is bullish and at the bottoms everyone is bearish.

I think it’s pretty much as simple as that. Investors get overly optimistic and exuberant in all kinds of asset classes and finally at the highs everyone believes the rally can only go on and on forever. At the opposite near the bottoms nearly everyone is calling for lower prices and further catastrophe ahead. Stocks in the sector are priced for near bankruptcy. Newsletter writers are universally bearish, and the small trader has a big short position. Only a few weeks ago the Bullish Percentile index measurement on the Gold Stock Index was at 0! That means nobody was bullish on the Gold stocks by the measure that is used. We quickly had an 8% rally in the index after that reading, then in the last few weeks we came all the way back down again to even lower levels!

If you watched the action last Thursday as Gold was melting down below $1200 a curious thing happened. The gold miners were ignoring the move and going green! On Friday, as Gold reversed to 1234 they went ballistic with one of my favorite miners going up 16% on Friday alone on the highest volume in 5 years! Those are the signals I’ve been waiting for to call the capitulation lows. My guess is some money managers are front running the coming 3rd quarter rotation they see in Gold and Gold Miners, Copper, Coal, and other commodity stocks.

So below is my basic GLD ETF multiyear chart using very simple monthly views to see the big picture. You can see a classic ABC pattern of bear market correction and now a near 61.8% perfect Fibonacci retracement of the prior leg up. I’d say enough is enough, pick your spots and start buying.




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SP 500 Extends Rally Off Thursdays Low

The September S&P 500 closed higher on Monday as it extends the rally off last Thursday's low. The mid range close sets the stage for a steady opening when Tuesday's night session begins trading.

Stochastics and the RSI are diverging but have turned neutral to bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 1633.22 would confirm that a short term low has been posted. If September renews the decline off May's high, the 38% retracement level of the November-May rally crossing at 1545.59 is the next downside target.

First resistance is the 20 day moving average crossing at 1633.22. Second resistance is May's high crossing at 1678.00. First support is the 25% retracement level of the November-May rally crossing at 1591.35. Second support is the 38% retracement level of the November-May rally crossing at 1545.59.

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Is Apple Setting Up For A Big Rally?

Our trading partner Adam Hewison of INO.com weighs in on where he sees the price action in AAPL moving.....

In today's short educational trading video, I'm going to share with you some of the potentially interesting set ups I'm seeing right now in Apple (NASDAQ:AAPL).

I will also share with you my step by step approach on how I intend to trade Apple. Presently, I see three unique set ups for Apple (NASDAQ:AAPL) that I will point out in this short video.

1. A technical setup that hasn't been seen since 2009.

2. A timeline that's a characteristic for Apple setbacks.

3. A fantastic Fibonacci retracement.

So what are you waiting for? Let's get started right away!

Judging by the initial feedback I have received in a in house sneak preview, you won't want to miss this video. The video runs about 7 1/2 minutes.

I personally believe this video on Apple (NASDAQ:AAPL) will give you a unique insight into this stock and company.

Click here to enjoy the video and please feel free to leave a comment. Let us know where YOU think Apple is headed.


Is Apple Setting Up For A Big Rally?
 

Final Stages of the Advance on SP 500....The Wave Pattern

Our trading partner David Banister has been projecting a potential rally pivot at 1552-1576 for many weeks now. The recent drop to 1485 although harrowing, was a normal fibonacci retracement of the last major rally leg to 1531 pivot highs. Banister believes that this 5 wave advance 1343 pivot lows is nearing an end based on mathematics and relationships to prior waves 1-3.

At 1569 the SP 500 would mark a perfect fibonacci relationships to waves 1-3 for this final 5th wave to the upside. In the big picture, we are still working higher off the 1010 pivot lows on the SP 500, and this rally takes 5 full waves to complete. He thinks we are near wave 3 highs, and wave 4 correction would be up next, followed by another thrust to highs if all goes well this year.

That all said, a multi-week correction and consolidation wave 4 pattern is likely once we pivot at 1552-1576. We should expect this correction to retrace anywhere from 80 -100 points on the SP 500, but one week at a time.

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Stock Market Commentary Week Ending Friday May 20th

The NASDAQ 100 closed lower due to profit taking on Friday as it consolidated some of this week's short covering rebound off Tuesday's low. The low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI have turned bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 2381.00 are needed to confirm that a short term low has been posted. If June renews this month's decline, the 50% retracement level of the March-May rally crossing at 2307.25 is the next downside target. First resistance is the 20 day moving average crossing at 2381.00. Second resistance is this month's high crossing at 2428.00. First support is Tuesday's low crossing at 2318.25. Second support is the 50% retracement level of the March-May rally crossing at 2307.25.

The S&P 500 index closed lower on Friday ending a two day short covering bounce off Tuesday's low. The low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are turning bullish hinting that a low might be in or is near. Closes above the 20 day moving average crossing at 1341.97 are needed to confirm that a short term low has been posted. If June renews this month's decline, the uptrend line drawn off the 2010-2011 low crossing near 1309.35 is the next downside target. First resistance is the 20 day moving average crossing at 1341.97. Second resistance is this month's high crossing at 1361.00. First support is Tuesday's low crossing at 1316.20. Second support is the uptrend line drawn off the 2010-2011 low crossing near 1310.86.

The Dow closed lower on Friday ending the short covering rebound off Tuesday low. The mid range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are turning bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 12,651 are needed to confirm that a short term low has been posted. If the Dow renews this month's decline, the 50% retracement level of the March-May rally crossing at 12,216 is the next downside target. First resistance is the 20 day moving average crossing at 12,651. Second resistance is the reaction high crossing at 12,781. First support is the 38% retracement level of the March-May rally crossing at 12,372. Second support is the 50% retracement level of the March-May rally crossing at 12,216.


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Can The Bulls Show us Some Follow Through on Wednesday, Can They Show us the Money!

The S&P 500 closed lower due to profit taking on Tuesday as it consolidated some of this winter's rally. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are overbought and are turning bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1119.71 are needed to confirm that a short term top has been posted. If March extends this winter's rally, the 62% retracement level of the 2007-2008 decline crossing at 1155.15 is the next upside target. First resistance is Monday's high crossing at 1147.90. Second resistance is the 62% retracement level of the 2007-2008 decline crossing at 1155.15. First support is today's low crossing at 1127.80. Second support is the 20 day moving average crossing at 1119.71.

The NASDAQ 100 closed lower due to profit taking on Tuesday and below the 10 day moving average crossing at 1876.75 signaling that a short term top has been posted. The mid range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are overbought, diverging and are turning bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1851.18 are needed to confirm that a short term top has been posted. If March extends this winter's rally, the 75% retracement level of the 2007-2008 decline on the weekly continuation chart crossing at 1947.00 is the next upside target. First resistance is Monday's high crossing at 1900.00. Second resistance is the 75% retracement level of the 2007-2008 decline crossing at 1947.00. First support is the 20 day moving average crossing at 1851.18. Second support is today's low crossing at 1850.00.

The Dow closed lower due to profit taking on Tuesday as concerns over tightening credit by the Chinese could delay our economic recovery. The mid range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If the Dow extends this winter's rally, the 62% retracement level of the 2007-2008 decline crossing at 11249 is the next upside target. Closes below the 20 day moving average crossing at 10508 are needed to confirm that a short term top has been posted. First resistance is Monday's high crossing at 10655. Second resistance is the 62% retracement level of the 2007-2008 decline crossing at 11249. First support is the 10 day moving average crossing at 10,573. Second support is the 20 day moving average crossing at 10,508.

The U.S. Dollar closed slightly higher on Tuesday as it consolidated some of Monday's decline. The mid range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If March extends Monday's decline, the 50% retracement level of the November December rally crossing at 76.66 is the next downside target. Closes above last Friday's high crossing at 78.44 would confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 77.81. Second resistance is last Friday's high crossing at 78.44. First support is today's low crossing at 76.89. Second support is the 50% retracement level of the November-December rally crossing at 76.66.

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Early Session Profit Taking Cools The Winter Rally

The S&P 500 closed higher on Monday as it extended this winter's rally. Profit taking tempered early session gains and the mid range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If March extends this winter's rally, the 62% retracement level of the 2007-2008 decline crossing at 1155.15 is the next upside target. Closes below the 20 day moving average crossing at 1118.21 are needed to confirm that a short term top has been posted. First resistance is today's high crossing at 1147.90. Second resistance is the 62% retracement level of the 2007-2008 decline crossing at 1155.15. First support is the 10 day moving average crossing at 1129.16. Second support is the 20 day moving average crossing at 1118.21.

The NASDAQ 100 closed lower due to profit taking on Monday and the low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are overbought, diverging but are turning bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1847.61 are needed to confirm that a short term top has been posted. If March extends this winter's rally, the 75% retracement level of the 2007-2008 decline on the weekly continuation chart crossing at 1947.00 is the next upside target. First resistance is today's high crossing at 1900.00. Second resistance is the 75% retracement level of the 2007-2008 decline crossing at 1947.00. First support is last Friday's low crossing at 1865.00. Second support is the 20 day moving average crossing at 1847.61.

The Dow closed higher on Monday and above the upper boundary of this winter's up trending channel crossing near, 10,627. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If the Dow extends this winter's rally, the 62% retracement level of the 2007-2008 decline crossing at 11249 is the next upside target. Closes below the 20 day moving average crossing at 10501 are needed to confirm that a short term top has been posted. First resistance is today's high crossing at 10655. Second resistance is the 62% retracement level of the 2007-2008 decline crossing at 11249. First support is the 10 day moving average crossing at 10,566. Second support is the 20 day moving average crossing at 10,501.

The U.S. Dollar closed sharply lower on Monday confirming last Friday's key reversal down. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If March extends today's decline, the 50% retracement level of the November-December rally crossing at 76.66 is the next downside target. Closes above last Friday's high crossing at 78.44 would confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 77.85. Second resistance is the 10 day moving average crossing at 77.89. First support is today's low crossing at 76.95. Second support is the 50% retracement level of the November- December rally crossing at 76.66.



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Stock Market Commentary For Thursday Morning

The S&P 500 was higher due to short covering overnight as it consolidates some of this week's decline. Stochastics and the RSI are overbought and are turning bearish hinting that a short term top might be in or is near.

However, closes below the 20 day moving average crossing at 1106.61 are needed to confirm that a short term top has been posted. If March extends this year's rally, the 62% retracement level of the 2007-2008 decline crossing at 1155.15 is the next upside target.

Thursday's pivot point, our line in the sand is 1127.55

First resistance is Tuesday's high crossing at 1128.20
Second resistance is the 62% retracement level of the 2007-2008 decline crossing at 1155.15

First support is the 10 day moving average crossing at 1114.21
Second support is the 20 day moving average crossing at 1106.61

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The NASDAQ 100 was higher overnight and appears poised to extend the rally into the end of this year. Stochastics and the RSI are overbought but are neutral signaling that sideways to higher prices are possible near term.

If March extends this year's rally, the 75% retracement level of the 2007-2008 decline on the weekly continuation chart crossing at 1947.00 is the next upside target. Closes below the 20 day moving average crossing at 1819.20 would confirm that a short term top has been posted.

First resistance is the overnight high crossing at 1882.00
Second resistance is the 75% retracement level of the 2007-2008 decline on the weekly continuation chart crossing at 1947.00

First support is the 10 day moving average crossing at 1848.17
Second support is the 20 day moving average crossing at 1819.20

Learn To Trade Gold ETF's

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How Did a Dead Mathematician Nail Two Major Markets Yesterday?

The markets I am referring to are the gold market and euro markets. Readers of this blog will know from our previous videos and examples that we are big fans of Fibonacci retracement lines.

In this super short video (1:49), I will show you the lines we are talking about for the above two markets. I think you’ll find it very illuminating as this example is so fresh. You will also find it very empowering.

Just click here to watch the video and as always our videos are free to watch and there is no need to register.

Please take a moment to leave a comment and let us know what you think of the video.