Yesterday I shared that a 50/50 challenge was at hand and at least a short-term rally in the S&P 500 should take place. Why was a rally due? The VIX was almost at the 50 level and the S&P 500 was at the 50% retracement level (see post here)
Below is an update to yesterdays 50/50 post…
CLICK ON CHART TO ENLARGE
Just because Gold is down today, that doesn’t represent a new trend, nor does a rally today in the 500 index off the key levels today represent a new trend…..yet new trends have to start somewhere and higher lows is something to keep an eye on!
One does have to respect that even though the 500 index has been a REAL DOG performance wise this month, should the 500 index break above and the VIX break below line (3), the ole Dog will most likely act a good deal STRONGER for a while!!! From a “Power of the Pattern” perspective, I would want to own an upside breakout with a trailing stop!
The NASDAQ which has led a lot of these moves made a lower low at the time the s&p made a higher low. This move from the highs in equities is the only time in many years that gold and equities have moved in opposite directions.
‘THE CROWDED TRAIN TRADE”. I am originally from India,and people love to travel without tickets.I have not laughed this hard in a very long time. You have put humor into analyzing charts and for that you deserve a big THANK YOU. Also you have given us a lot of valuable information and it is possible to see GOLD come back down
to the $1400 level.
Hey Chris –
“Roger” the higher Low (so far) on the daily S&P 500 Index; perhaps it’s a start. What I’m looking for is a significant increase in volume to accompany the wide range “up bar” (close at/near the high).
Volume increased today, but looking back at all of the down bar volume, it looks like it’s got some proving to do to absorb that selling. Then again, we could just be in a wide trading range for awhile (my current feel of it).
Keep up the excellent observations, always insightful and thought provoking. Good Trading. … Tom …
Great relative strength in JAG today, great job. Miners lucky today the the broad market was up 300 points?
Yes, I’m watching closely. I recently started a position in JAG, a gold miner which has beaten like a dog for 2 years before recently breaking out to the upside. I expect I’ll have to keep a pretty tight leash on the downside I’m willing to endure.
Dave…that is the great question! With Gold breaking down, maybe representing more of fear trade than even govt bonds, odds now increase the “dog, will be stronger” than most will be ready for.
The “Power of the Pattern” in the “Climate of Extremes” post was suggesting the conditons were ripe for a surprise and the Fib resistance looks to have kicked it all off. I sure hope that Gold miners owners took notice yesterday when I suggested to protect holdings ASAP in the link below.
https://www.kimblechartingsolutions.com/2011/08/gold-stocks-are-now-back-to-where-they-were-back-in-december-2010/
An excellent call, as usual. It’ll be interesting to see if equities can gather themselves for a meaningful push higher in the short term.
Hey Dave….Appreciate your viewership and your great blog! Honored and humbled to have you as a viewer. Despite following the patterns with under a microscope for three decades, I continue to be amazed how these markets respect and can turn on key Fibonacci support and expansion/extension levels.
As you know a key Fibonacci target for a reversal in prices has been $1,900 in Gold.
https://www.kimblechartingsolutions.com/2011/08/are-we-there-yet-gold-is-hitting-a-fibonacci-target-pre-market-this-morning/
How interesting that Gold poked it head above this level in pre-market trading and then the ole uncle Fibonacci played the ole “whack-a-mole” game at this resistance level and a key reversal took place. Now Gold is down almost almost $80 off its highs. When was the last time we saw gold from high to low off this much??? Ironic it took place at channel and Fibonacci resistance? Not in my humble opinion.
Based on the post time, it looks like this article was posted before the Virginia earthquake, which makes your headline-based control over nature even more spectacular than your chartological understanding of the markets! Truly awe inspiring. I was a huge fan before. I’m an even more awestruck fanboy now!