Stalled At Resistance

There was timing last Monday and since then, the S&P 500 (ES Z0-D) has basically stalled out at resistance. It is now in a very narrow 5-day trading range. There is also timing today, so expect this narrow trading range to resolve itself shortly. Key support is the 1133 – 1126 range. If that is broken, then it opens up the potential for a more significant correction.

The move off the August lows is very similar to the July rally. If this is a “two-step” rally pattern, then the potential downside is always 127% of the move, which would be 956 for the S&P 500 (that is how the $1309 target for Gold was devised). I’m not saying that it is going to happen. I am just saying that we are at a key decision and if the market wants to turn lower, this is a logical place and time from which to do so. Don’t just go throwing your money into high-beta stocks, hoping that prices go higher.

There are a number of leaders that are sitting in narrow, multi-day trading ranges. I will list those later today. I was stopped into and out of Oracle in a number of minutes on Friday. I am very nervous about them rolling this thing lower from here, but know what I want to own if they break prices higher.



Gold has gone parabolic. It can pull back to 1296 and still not violate the uptrend. It hit the 1309 target and just keeps grinding higher. There is nothing to do with Gold until it pulls back or goes further into this parabola and sets up a short. There is timing early this week for Gold.



Gold Stocks (GDX) have stalled out in their advance and are now sitting in a 13-day trading range. GDX is also sitting right above the out breakout point of $54. A pullback into the $54 range coupled with a shallow correction in Gold would be ideal.



The “Junior” Gold Stocks (GDXJ) have been trading more like Silver than Gold. There have been some mergers and several Canadian Gold stocks have gone parabolic. You can see the consolidation on GDXJ. It can break either way. I am watching it closely.



US Treasuries (ZB Z0-D) are in an uptrend and have recently held daily support. The ideal technical target (it obviously does not have to be reached) is the 127.2% extension at 137.11 Many of the Bond ETFs have a similar pattern.



Everything still comes down to the crashing US Dollar. You do not see Gold, Stocks and Treasuries all rally at the same time unless it is simply a result of money being printed – which is where we are. What the Yen closely this week to see if they will fight China, who has been intervening to strengthen the Yen and help Chinese exports. The Yen is very stretched.