FED Induced Sharp Drop in Stock Market Coming!

By: Brad Gudgeon | Sat, Sep 12, 2015
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The planets are coming together for the perfect storm on September 17th. First we have Mercury Retrograde, which often occurs at a top for the precious metals sector (and even the stock market). Then we have Jupiter opposing Neptune while Saturn enters into the sign of Sagittarius. Exaggerated hysteria or panic would be the best way to explain this astrological set up. My best guess is: the FED won't raise rates this time, but will hint strongly for the need to do so very soon (China may have nipped a September hike in the bud by devaluing the yuan). Everyone is expecting a retest of the August 24-25 lows anyway, so this is the perfect excuse to take it down. It also fits the pattern of an X wave of [B] bottom within an IMP (Irregular Megaphone Pattern -- discussed a few weeks ago). The big question is: will we fall just below the SPX cash price of 1867 near 1850 or below the SPY or S&P 500 futures price set the morning of August 24, 2015?

As I said in my last article, I believed the stock market was topping and gold bottoming. Gold and the gold stock sector (GDX hit a new low Friday) look to rally strongly onto the FED announcement. GDX made a nice reversal hammer. As it looks, the set up is there to rally strongly so they can knock it down again. By September 21-22 both sectors (stock market first and then gold stocks with gold) will likely be bottoming and a strong rally should ensue into early October. This will be the set up for the final C Wave down in the stock market to around 1700 by October 12th, in my opinion.

Below are three charts with e-wave, cycles and astro notations for the SPX, GDX and GLD. In times like these, often times, the Gann 8 TD tops run an 8,7,6 trading day topping pattern. This is due to the excessive chop after a huge plunge like we just had.

S&P500 Hourly Chart
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GLD Daily Chart
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GDX Daily Chart
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Brad Gudgeon, editor and author of the BluStar Market Timer, is a market veteran of over 30 years. The subscription website is www.blustarmarkettimer.info

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Brad Gudgeon

Author: Brad Gudgeon

Brad Gudgeon
BluStar Market Timer
Blog
eaglesoveramerica.com

BluStar Market Timer Investment Philosophy: The stock market is currently in a technical Elliott Wave Bear Market Rally. It has been exhibiting A-B-C type waves instead of the normal 5 Waves since the market topped in 2000. According to "The Original Works of R.N. Elliott", we are due for a move down to about the S&P 500 442/443 area in the next few years. In my opinion, this is no longer a buy and hold market, but a traders' market. We mainly swing trade the market with funds and ETF's, but otherwise trade according to the market's disposition and to the traders' discretion. For the year 2014, BluStar Market Timer is rated #1 according to Timer Trac. http://www.blustarmarkettimer.info

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