Folks,
Market Observations for the Week: The SPX, NDX and gold all rallied into the New Moon Timing Window and tested their ATHs – we could be making the highs for the week today. The VIX gave us an EW 5-waves down on Friday and argued for a SPX rally day on Monday. We are holding cash and but continued to trim some trading positions in gold, silver and HL on Monday. We had predicted extreme volatility in the 10/10-10/17 3-star critical reversal time window, and we got that and now we could see some more rally in the SPX and gold into early Tuesday’s New Moon before a correction. The Tuesday after a monthly option expiration is a pivot day in our work for the SPX. As we have harped on repeatedly, when the SPX fails to give us a decent pullback in September, we are wary of the following October – especially the second half. The IWM made a new ATH on 10/14 after the DJIA, SPX, NDX, and NYA made their ATHs in recent weeks, so we may be close to an important top. Gold made a new ATH at $4398, but the GDX has clearly underperformed gold here and that is signaling that the PM sector has entered a correction. We are watching the trade in gold and silver carefully into the 10/20-10/22 New Moon Timing Window and silver looks to be in correction mode. In the longer term, the GDX could test $90 by December, and silver stocks could continue to work higher since silver has made a weekly close above $50. Our current investment positions are: 20% cash, 5% QQQ, 25% GDXJ/SILJ/REMX, 5% XOM/COP/CVX and 20% physical gold/silver/platinum. We have a 25% overall allocation to our short-term trading account which was last updated on Monday to include: 75% cash, 0% SLV, 0% GLD, 0% SILJ, 0% ETHA and 25% XOM/CVX.
TURNING POINT DAY
Our next turn window is 10/21, which is the New Moon.
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