Market Summary

In the image below I consider the Weekly chart the long term view, the Daily chart the intermediate view and the 240 and 60 minute charts the short term view. Not a good week in the market last week. We are in the red on the short term but green on the long term and just barely green on the intermediate. We are about to roll over on the intermediate term. Is this just a small pull back or the beginning of a larger correction is the question. We will have to wait and see. Click on image to enlarge.

The clear winner in these markets year-to-date is the EEM emerging market etf up 45 percent. As it has been leading to the upside keep an eye on this one to see if it leads to the downside. Click on table to enlarge.

Market Timing

Markets overshoot to both the upside and the downside but the trend is the best indicator we have as to where the market is going. The image below shows the trend in the background color of each of the four charts for four time frames: Weekly, Daily, 240 minutes, and 60 minutes. Having all these time frames together in one image helps show and break down the turning of the market from going up to going down and in what time frame. A corrective trend is occurring within a larger bull market if we focus on the two charts on the right side of the image, the 240 minute and 60 minute time frame, with the pink background color. Click on image to enlarge.

Will Gold breakout?

The chart below is a 2 year daily price chart of $GOLD showing a massive base formation and a chart pattern that looks like a massive inverted head-and-shoulders formation. $GOLD is coming up to its 2009 high which is also the neckline resistance at the $1007.00 area. Should $GOLD go above this area it is very bullish for $GOLD but a bad sign for our nation and our economy. While gold has been said to be a hedge against inflation its true value may be as a hedge against geopolitical uncertainty. Should the stock market roll over and head south for any length of time I think that would increase the fear level which also correlates with rising gold prices. We will have to keep an eye on this one. Click on chart to enlarge.

5th Wave Top

5th-Wave top in the XLF shown here. Many other indices showing a 5th-Wave pattern.