Stock Market Topped Thursday, Now What?
Last week, I predicted an important top for September 17 based on astrology. While I thought it would be a lower top, nonetheless, it was an important top caused by the FED: and as predicted, I said that they would not raise rates, but they did place something in the FED-speak that would cause the market to sell-off dramatically. That something was "no more QE". From late Thursday to late Friday, the SPX fell over 4%.
Friday left the stock market fairly oversold on a short term basis: the TRIN ended at 2.81, the Gann cycles bottomed and there were signs of minor momentum divergences that should launch us into an a-b-c type up-down-up week ahead. The astro-cycles look fairly negative for the week after next, but not ominous. The expected move to take out the lows of August 24/25 lows is coming. I have Sept. 30th and Oct 2nd being important dates for lows. I expect that SPX 1850 will be tested. Once 1850 is tested, I believe we see a strong rally throughout much of October that should take out Thursday's high. This is where it gets interesting.
In the past few months, I shared what I call the coming IMP pattern (which we are now in). The charts below show what I believe is ahead into early October and beyond into early November. The biggest portion of the down move is still dead ahead! Also below, I have included a chart of GDX, which I expected to rally through this period we are in now. I have amended it further suggesting after a period of softness early next week, that gold and GDX should continue to rise into late September before succumbing to weakness caused by the expected drop in the stock market.
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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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