Monday, May 9, 2011

Correction or Transition?

The low made on May 5 @ 1325.50 (SPM11) is the low point of the recent swing. If this low is taken out the likelihood of a rally into new high territory diminishes. If the April 18th low of 1290.50 is broken the onset of a major correction--or bear trend--becomes significantly greater.

Although there are many potential turning points in May and the early part of June, Monday May 23rd could be important.

Gold is looking rather nasty. The three peaks and domed house formation is tracing out point 24. A rally should ensue for several days. If the formation is valid, when the rally fails the market could be on a precipice.

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