6-7% Stock Market Pull Back Likely, Gold Still Going Down

By: Brad Gudgeon | Thu, Nov 5, 2015
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The stock market's recent advance has been nothing less than spectacular. Caveat emptor: the rally was mainly in the large cap stocks. The FED's determination to raise interest rates in December is predicated on the upcoming economic data. One of the most important releases comes out on November 6th, the jobs report.

Gold has been falling, and we are still short the miners expecting blood to run on Friday on GDX and very likely the SPX too. Good news is likely to be bad news.

Cutting to the chase, the charts below tell the tale: a 6-7% drop in the SPX and Dow Industrials expected and further blood in the miners into the ideal November 12 date. GDX could easily fall below $12 this time and SPX should go below 1972 according to the IMP. We have a Rising Wedge also that has been broken and Thursday formed a spinning top in a down trend, which often precede big moves.

Technical divergences on the SPY include: stochastics, money flow, OBV and momentum amongst others. The daily MACD turned down today for the first time in a few weeks. E-wave analysis suggests that after this pull back, a faster, more powerful up-wave should develop and take at least the Dow Industrials to all time new highs soon. The whipsaws are likely to continue as uncertainty about the FED's intentions stay on the burner for a while.

Dow Jones Daily Chart
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S&P500 Hourly Chart
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S&P500 Daily Chart
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GDX Daily Chart
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GLD Daily Chart
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The last 4 of these charts was written on November 4 and much has come to pass already with GDX breaking down the door of the daily Bollinger Band. The FED's hinting last week will likely come to haunt us on Friday this week, a delayed reaction.

 


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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