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Stocks to Fall, Safe Haven Assets to Rally

What we see this weekend is that safe haven assets, U.S. Bonds and precious metals, are about to rally, and risk assets, stocks, are about to decline.

I am not sure how much longer this stock market can hold up with the help of Fed intervention to elect their self preservation candidate, but the internals are weakening fast and are setting up for a significant decline. For example, Friday October 7th's decline should have been much stronger as Selling Pressure rose sharply, however Demand Power did not decline much. That disequilibrium identifies an artificial buying presence since markets need an equal number of both Buyers and Sellers. The buying pressure from a normal market was not present, and stocks should have declined to levels that would bring in market buying participation. Prices did not fall to those levels.

But we see a perfect textbook sideways symmetrical triangle in the Industrials this weekend, which is warning that a significant decline should start any day now. This triangle is large, has taken a month to form, so the decline off of it should also be large.

Dow Industrials Daily Chart

There is also a massive and growing Bearish Divergence between small caps, the Russell 2000, and its 10 day average advance/decline line indicator. This is warning a major decline is soon coming to small caps. Same with the NDX where we see large Bearish Divergences between prices (rising) and both the NDX 10 day average Advance/Decline Line Indicator and NDX Demand Power measures.

RUT

NASDAQ 100

U.S. Bonds are close to finishing a five wave decline, and their Full Stochastics are deep oversold, suggesting a bottom is imminent and a rally in Bonds should start very soon.

30-Year US Treasury Daily Chart

Gold and Miners fell slightly Friday, October 7th. Their Full Stochastics readings are deep oversold, at levels where key bottoms have arrived over the past year. A rally phase is close to starting.

Daily Gold Chart

 


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"Jesus said to them, "I am the bread of life; he who comes to Me
shall not hunger, and he who believes in Me shall never thirst.
For I have come down from heaven,
For this is the will of My Father, that everyone who beholds
the Son and believes in Him, may have eternal life;
and I Myself will raise him up on the last day."

John 6: 35, 38, 40

 

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