Gold: A Critical Juncture

The weekly chart provides my preferred and alternate wave labels as well as the equivalent 10 and 40 week sma's (50-sma and 200-sma day equiv.) . Also of key interest to me is is that the trendline from 4/2009 continues to be probed and supportive of this market. As such, it is in my opinion that, while I haven't provided any bearish wave count, a failure of non elliott technicals , such as a break of the trendline and 40-week sma, could initially draw price to where w.(3) = 1.618 w.(1) at 1344.3.  

In addition, I showed this chart on Oct 19, 2012 and the cyclic turn of 11 and 22 months. Read the initial post

The October high may be MONEY given the elliott work that I have provided. If so, Gold Bulls are about to be ambushed. 

Let's See what Happens. 

Best of Trading

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The Market Pulse

Tonight's blog post will be a brief follow up to my lengthy weekend video. As I begin this post, the House has voted favorable for the raising of the debt ceiling and the market reaction is muted.

Essentially, the table has been set. We know the levels... bearish below 1252.25 and bullish above 1352.75.

Looking back on today's wild ride, the bullish move was called for in the weekend video. My intraday levels for the retracement were 1307.5 - 1321.25 (not shown on chart). In the ON session, prices actually reached beyond the first target to 1309.5 before failing.  Once the daily session began, within the first five minutes of trade, the market had gapped up to 1304.75 and then proceeded to lose all bullish momentum. It fell hard in response to a poor ISM number, as fear of a double dip recession are starting to emerge... or was it also that the the market hit a wall at the 50 sma that even I missed?

Even though the market closed off the lows, price is now below the 200 sma. As I stated in my weekend video, " institutional investors may not be willing to defend their positions". Tomorrow will be a defining moment for them. What they do will certainly influence trade in either direction.

I can make a case that we made five completed waves in today's session but I need to see tomorrow's trade to more accurately determine how today's move fits into the larger wave pattern. I'll update readers with my thoughts as soon as I am able to draw a high confidence conclusion. Until then look up in a three wave affair to typical .5 - .618 retracement levels.


Best of Trading

The Market Pulse: NASDAQ and S&P

The Market has virtually no net gain or loss since March 2, 2011. By now every trader has their eyes on what appears to be a triangle pattern. With tomorrow's jobs report, traders may finally push the market in the direction of the "new" near term trend. So look for some volatility tomorrow.

Earlier today I tweeted that the NASDAQ was the weakest of the indices. I think it's important to cover this market since the greater possibility exists that the NASDAQ may lead the other markets down. Price has tested the 50-sma on five occasions. A print below 230625 would have further bearish implications, yet support is lurking just below the market at 2303 and 2281 - 2282. I wouldn't doubt that a stop running exercise will unfold. Should any sell off have substance, my near term target is 2258.

Turning my attention to the ES_F market, you can see that the market is yet to challenge the 50-sma and price is oscillating along the lower elliott channel line. As a reminder, a significant break of this line on a closing basis and a print below 130275 would negate any idea that a triangle was unfolding. Keep in mind that the March contract expires so the equivalent in the June contract is 129825.

If the wave structure is a triangle fourth wave, then w.e circle may have been struck at 1312.27 that was  followed by a minor five wave advance and as of the close... a choppy second wave is developing. This interpretation would be confirmed with a print above 1325.74. Thereafter, price will make a new recovery high to beyond 1344.07 in the $SPX and 1343 in the ES_F.

In conclusion, tomorrows trade centers around 1325.74 (bullish) and 130275 (bearish) in the continuous contract or the equivalent in the June contract is 129825 (bearish).


I hope you found this information helpful.

Best Of Trading