Indications suggest a stock market which is currently oversold and bottoming short term, but still has a long way to go to finish this bear. In fact, I believe we could see the SPX fall as low as the 940-950 area by October of this year as we enter the final innings of the crash phase of the 8 year commodity cycle. Gold and especially the gold miners are struggling even though we are showing positive COT figures.
The charts below show the SPX and GDX and where I believe we may go in the short term:
Last week saw a series of 3 astro-trines that saw the stock market rally only to sell-off again in a choppy week. GDX has pretty much seen the same kind of action. Another trine is due tonight, so any positive action may again see some selling. Mercury (retrograde) is also translating the Uranus/Pluto square this week between January 20-22, so we could see an attempt to rally into mid week, only to sell-off again into late week. Overall, it looks to me that we attempt a rally into and around the FED meeting. Whether we make it to 2021/25 SPX this go round is unknown. Eventually, over the next 2 months, I think we may. In any case, 1960 SPX looks attainable this month.
We are in the area of the 100 trading day low and potentially may see sideways action throughout the February/March period (a bear flag) before falling hard again into June where the next 100 TD low is forecast to nest.
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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