Tuesday, August 31, 2010

S&P 500
The S&P is on VERY thin ice! Last evening it was suggested that the S&P may challenge the resistance at 1072. That is exactly what transpired in the Globex session before the markets opened Monday morning when the S&P traded at 1072.50. (E-Minis @ 1072.75). The markets reversed in the regular session and accelerated down into the close. THIS DOES NOT LOOK GOOD FOR THE NEAR TERM. If the SPU trades below 1040, it will suggest that prices are headed SIGNIFICANTLY lower in the near term--perhaps MUCH lower. A close on the VIX above 28 would be indicative of a imminent decline of large amplitude.

The only caveat that would suggest that a wave three decline is NOT commencing is if the S&P can manage to trade back over 1073.00. If this was to occur, the market could hold up and rally into the month end. A rally above 1086 would cause caution flags to come out and a trade above 1105 would likely negate the bearish market structure.

The Energy Dates will be posted tomorrow evening, but the preliminary dates are Sept 7-9th and September 20-23rd. The latter date could be a time period of INTENSE DANGER for the markets.



T-Bonds
The market rallied on Monday but remains below the high of last week. Bonds may attempt one more rally but if a top has not been made last week, one will be established on the next rally. Bonds may rally based on a 'flight to quality' rationalization if the stock markets decide to get a haircut.Protective stops on short positions should be adhered to according to your personal trading strategies.
128.25-128.30 remains the near term target.

U.S. Dollar
The $ looks like it is ready to re-establish the uptrend. The is a shortage of bulls out there--which is always a good condition for the market to be in if one happens to be holding long positions.
Check last evening's comments on the U.S. Dollar for further details. Aggressive traders and pyramid traders may have a chance to add to base positions if the recent high is taken out. Don't be greedy and trade in a disciplined manner. Over exposing oneself is a recipe for disaster.


Gold
The market is indecisive! The 45* trendline from the July low will be tested over the next day or two. This is occurring at the same time that the down-trend line from the 1265 high is acting as resistance at current price levels.

There is a trend change due in the early part of September which will likely establish an intermediate cycle trend direction. Stay tuned.

No comments: