Gold to Rally More, Stocks Should Drop
GDX looks to rally hard in a 'c' of "C" wave, likely into Early the 25th. We could see GDX around 24.50. It looks like a bear rally. The jobs report on December 2 could knock the precious metals sector down like it did from November 9-14.
The SPX is running on fumes and should drop at least to the 2162 area by early Friday I would think. Higher highs into next November 30-December 1 look likely and up to around 2208/09. My target for next week of 2203 was hit today.
The stock market 40 week low (November 4 on the cash market and November 9 on the futures market) marked an X wave of a larger topping process. It is very odd for a 40 week low to be so shallow, but I have resigned to the fact that it has already come. By next week, we may see the Wave Y top with Z to come to the down side.
Wave X started on July 15th and ended on September 12th. Wave Y began on September 12th and should end next week. Normally, Wave Z of a topping pattern like this comes swiftly, but may take longer than either Wave X or Y. The next possible 10 week low would be due in early/mid January and then the 20 week low in early to late March. This coming low should be a much larger one than recent ones.
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