SCT Issue #238
Gold held the first weekly sell signal on Friday at $1,086 and managed to rally back to the $1,100 level by the end of trading. Early this morning, gold was higher again, reaching roughly $1,104 – but is now acting weak, giving up most of this morning’s gains, trading as I pen this issue at roughly $1,092.
So is gold now headed into a major rally, as many pundits would have you believe?
I don’t believe so. Yes, it is still oversold. Yes, it can rally further as shorts cover positions and ill-advised analysts and touts get their clients to buy, proclaiming a bottom may be near.
But let me be perfectly clear: Gold’s downtrend is not over. It should remain weak into next week, and very possibly still fall to a new low. From there it should bounce again, perhaps into September, and then decline in a whopper of a move to new record lows in November likely well below $1,000 an ounce.
Therefore, I recommend holding all bearish positions. If anything changes and we need to sidestep any further rally, I will immediately let you know.
Meanwhile, China’s markets were down hard this morning, with the Shanghai A Index down over 8 percent. That’s the equivalent of the Dow Industrials being down over 1,400 points.
Our stock markets are acting weak, but I am not yet convinced the real slide is here yet.
I may look to go long China, but at lower prices. Wait for my signals.
Other markets where I am very close to pulling the trigger include a bearish position on crude oil, a new bullish position on the dollar, and a bearish position on the euro and Europe’s stock markets.
Hold all current positions and stay tuned. New recommendations can come at any time.
Best wishes,
Larry
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