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The State of the Trend

Last week the expectations were that the Qs will reach our upside target of 79.5, and that the SPX will fail to produce a clean break above the July/August congestion zone. Both were fulfilled and in the process the market breadth indicator has reached its highest level since October 2011:

SPX Chart
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This, along with the seasonal pattern suggests that another sideways/down phase is likely to follow. It should be noted that the trend of the main indices is up in all three time frames (daily, weekly and monthly), and a period of consolidation is necessary to digest the gains since the beginning of September.

The monthly chart shows that the next cycle peak is due in January 2014 which, as it happens, coincides with Ben's stepping down from the Fed:

SPX Monthly Chart
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Looking at the metals, the technical outlook didn't improve last week. Both gold and silver made lower lows and, until they break above their respective down sloping channels, they will remain under pressure:

SPDR Gold Trust Weekly Chart
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iShares Silver Trust Weekly Chart
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