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Brad Gudgeon

Brad Gudgeon

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…

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Update to the Stock Market and Gold Mining Shares

Most people did not expect what happened on Monday morning. The futures traders took the ES down to 1830 with the cash market stabilizing at SPX 1867 in just a few minutes time. Clive Maund gets some kudos here calling for the Dow Industrials to be down a potential 1000 points Monday, but as I recall, he believed it would be a public panic, not what just happened with the futures (Good call Clive!).

This was first time I've seen my TLC indicator be off a day as it was calling for a Friday bottom. The Gann cycle low was maxed out at 16+4 TD's from the July 27 low and the 4 TD low part of that cycle was due no later than early Monday, which is what happened.

We blasted right through my IMP lower rising trend line (as shown in the chart below), which is what one would expect for Wave A of the pattern. Next, we should rally into the next Bradley turn, cycle date of August 28 to form wave 'w' of the larger wave B. Targets on the upside include 1985 and 2014 SPX. Wave 'x' should tag the mid 1850's by either Sept 14 or 17th, which should launch into the final 'y' wave top just above 'w' by or around Sept. 30- Oct 1. I'm looking for a resolution of this bear market to occur at or near 1700 SPX by Oct. 9-12.

SP 500 Chart
Larger Image

GDX was expected to make a low today near 13.94. Instead, we tagged the .764 Fibonacci support at 13.60. The pattern is very bullish going into September 1 from here. Upside targets include 17.67 and 19.22 for GDX. We'll see.

GDX Chart
Larger Image

We got caught long via SPXL Monday, but stayed with it. We will likely exit those positions Friday this week. We were short GDX via DUST and made 19.6% on that trade in 3 days. We will be buying NUGT late Tuesday for what looks to be a very promising long position in the miners.

 

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