Mornin' All,
Gold - The 4hr hammer candle that I mentioned yesterday seems to have done the trick and excited a rally back up into the Bollinger Bands just as anticipated. Closed 3 days under the BBs then popping back up through on the 4th, text book BB theory for Gold. Keep in mind that nothing is certain, but in the great majority of cases this theory is true for Gold and the stock market, Silver less so.
I think the most volatile move is over. Gold may now firm up a bottom over the next couple weeks. Another downward move looks likely into October, but not sure if it will be a lower-low or higher-low compared to the 1532 bottom yesterday. The Wave count is a bit messy, but at least one more wave down looks possible while PoG remains below the 10EMA on a daily closing basis (currently 1727 and falling). Again I reiterate, bulls want to see PoG remain above 1614 by the end of the week, to avoid a bearish OKR on the monthly chart.
Silver - Basically in lock step with Gold, seeing a bounce off a 4hr hammer candle from a very oversold condition. It too is under pressure while below the 10EMA and a lower-low is possible in October. But as long as Silver remains inside the blue base channel that I charted, chances are good that a major bottom could be finished soon, and a new rally may begin, at least a wave B up. This correction is on the same scale as the 2008 correction. The 2008 correction was sharp in nature, So this correction could be irregular, but spread out over much more time. There is also the possibility that this move down from $50 is the handle of a large 30+ year Cup and Handle formation. I will chart these thoughts soon.
Dow - Looks like we are going to see some end of the quarter window dressing, a little 'lip-stick on the pig'. After fund managers were caught with their pants down in July, they are likely to use any reserve cash to run the market up before the end of the month so that paying customers will see a better end result. A Little POMO action is also helping things along. If they can push the Dow up above 11,550 this week my bearish HnS pattern that I have pointed out will be killed, which could spark and even great short cover rally. But come October 1st after the quarter is all painted up nice and pretty, we may see the very same fund managers climb over the top of each other on their way to the exits. Resistance to the upside exists at the 10EMA (11,104) and the 20DMA (11,256).
The DAX (German Stock Market) gave a gap up this morning that has yet to fill. They have a few hours left to trade, let's see if they close it in a hurry. If they do fill it today, it signals a possible exhaustion gap which is bearish. We may also see the Dow give an exhaustion gap up this AM.
BAC - Popped above ST resistance yesterday at 6.50, the next significant level is 6.80 which was the previous break-down level. This rally could be just a back-test of that break-down before heading lower. However if BAC can surmount 6.80 then all bets are off, much further upside very possible.
USD - Not behaving as previously anticipated. Key support is at 77.51. Currently we are seeing a small bounce off the 10EMA level at 77.60. The 3/10/20 ribbon is still bullish but will likely enter a neutral alignment if USD closes the day below the 10EMA. Either way, for a long side bet the risk is fairly minimal at this point with stops under 77.51.
I wanted to get this out quickly, I may come back later and fill this article in with charts a bit later in the morning.
All the Best.....
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