The month ahead looks choppy for both markets. Gold (especially the miners) has just come off of hard drop, so we may expect an upward/sideward bias until we get past Mercury Rx (retrograde) around September 22, where we could see a more explosive up move into early October with a GDX target above 33. Next week looks fairly bullish to me, but with some attempt at selling the rallies (look for the 28.43 area Wednesday and also around 29 Friday to be sell zones). Tuesday may go down and if it does, would represent a nice buying opportunity in the miners and PM's, IMO. Taking profits early when in Mercury Rx is usually a wise idea.
Taking profits early in the SPX would also be a good idea with Mercury Rx next week. Ideally, we have the 8 TD top on September 2 with the 5/10 week low due on September 7. It is possible we could eke out a higher high on Tuesday, but a fairly sharp drop next week looks likely although I would say that the 2150's should hold any decline in the SPX.
Overall, we are nearing an important top around the 13th on the SPX, but a drop of less than 100 points would be the maximum expected as we progress toward month's end. An early October top in the low/mid 2200's should set the stage for a large drop into November.
As you can see, the chart of GLD has just had a False Break of a rising wedge. This means the next rally would be the terminal or last rally of both sequences.
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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
