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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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Stock Market, GDX Topping Again?

Since it is still the Holiday Season, I am making this article brief. The SPX is at the 16 TD top +/- 3 TD as of Christmas Eve. There is an 8 TD top due Dec 30 +/- 2 TD's with the moon in Leo/Virgo on the 29th. On the 29th, Mercury squares Mars, and again this will happen on the 5th of January (these are negative). Last time we had a top like this (moon in Leo/Virgo) was Dec 1/2. Christmas Eve was the 4/8 TD low, so we may see a pop up on Monday. It looks similar to the late July top right now, so it could go into Dec 30 and as high as 2092/95. The Put/Call ratios are also very similar to that time frame.

The next important low is the 20 week cycle from August 24, which last ran 115 TD's and can run 85 to 115 TD's. The astro moon cycles are set up for an important low around January 7th and again possibly in early February around the 4th. There is a Gann 16 TD low due on January 7th with a TLC low due also on that date. A Bradley turn is due December 25th (with a full moon) and again on January 6th, with Jupiter going stationary/retrograde on the 7th. Uranus went direct on December 25th.

An important clue whether or not we have an August 24th type event in early January may be with GDX, the gold mining ETF. It is due for a pull back early next week, as the cycles have been running a 2-1-2 up move followed by a 2 TD pull back into the 8 TD low (now running 7 TD's). If we can pull back to the lower down sloping line on the chart near 13.20 Tuesday and then rise well above it by January 6th (one day past Mercury stationary/retrograde, often an important PM turn) we may have a stock market meltdown on the 7th. Either way, GDX should top on January 6th, so it is worth watching.

Seasonal/Holiday trading is some of the most difficult to do, mainly because of the lack of volume: it is easily manipulated by the futures traders.

The SPX chart below shows the fan formation lines 1,2 and 3. IF 3 is broken, a visit to the previous lows (SPX 1867) or lower would be likely. Notice also that the daily MACD may be attempting a bullish cross over or it could reverse with a "Kiss of Death". Even if it does give a buy signal, it will likely be a fake out. The daily stochastics are pointing up.

S&P500 Daily Chart
Larger Image

Market Vectors Gold Miners ETF Daily Chart
Larger Image

GDX gave us a daily and 4 hour MACD bullish crossover. Often times, these buy signals result in a couple of days of severe selling first before moving much higher. Even with the COT reporting net commercial longs, it is tough for gold and silver to move up against the rising dollar for very long.

Overall, the astro picture for 2016 does not bode well for the markets. With continued commodity deflationary problems and a stronger dollar, profits will shrink. This situation should continue until the introduction of the Yuan as a world reserve currency in the fall of next year. Once the flood of fiat dollars start to return back to the USA, we should see a commodity inflationary boom along with a higher stock market into 2017/18 that will likely be followed by a huge bust going into 2020. The stage is being set for WWIII and possibly a New American Revolution as we are repeating an 80/240 year cycle.

I am happy to see that terrorism was not a huge issue last week as the set up was there for it in the astro charts. Happy Holidays and stay safe! We still face some tough times ahead.

 

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
BluStar Market Timer offers auto-trading for those who don't have the time or inclination to trade their own accounts.

 

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