Wednesday, May 25, 2011

GOLD and S&P Update

GOLD (June)
Gold is rallying and has taken out the May 11th high of 1526.80 reaching the 61.8% retracement level of the latest decline. A close below 1462.50 would be quite bearish and could possibly lead to a violent decline.

S&P 500
The S&P is showing waning momentum and is having difficulty rallying from the latest decline. A close below 1316.20 would be a warning of further weakness while a close below the 1294.70 low of April 18th would strongly suggest that an intermediate cycle decline has commenced. While a further rally is quite possible, a labored move above recent highs would make the structure of the market highly suspect. Caution showed be exercised at these levels as the markets have reached harmonic price levels (1360-1370) and the intermediate cycle uptrend is getting quite mature.

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