It’s 3:07 a.m. EST as I pen this issue, and I have my eyes glued to Asian trading of gold and silver. Gold is now just a hair away of breaking critical support at the $1,310 level.
Yesterday, in New York trade, the October gold futures contract got as low as $1,308.30.
Clearly, the cycles are keeping the pressure on the metals, as expected. Today is critical. If gold can close below $1,310 … the pressure on the longs will be intense, likely leading to panicky-type selling next week.
And if $1,305 gives way, look out below.
The chart action in gold still looks terrible. Here’s a 20-minute chart of the December gold futures contract at 3:22 a.m. EST. Pressure is on. A break of the $1,311 area in the December contract would send gold hurtling through $1,305 …
And then lower – to well below $1,300. Silver’s pattern is equally, if not more, bearish.
Ditto for the stock market, which continues to trade heavy. With cycles pointing lower, major support will come into play from 17,000 to 17,200 …
BUT, as I noted yesterday, should 17,000 give way – entirely possible – a move down to 16,400 could easily unfold.
Today is so-called “quadruple-witching hour” when a series of popular (mostly quarterly) options expire. So expect some market volatility. We also have the Consumer Price Index (CPI) release at 8:30 am EST.
Not that these things change the trend; they don’t. But they can often be the trigger for the next big move, which in the case of the metals and the Dow, among other markets, should be lower.
Meanwhile, the dollar continues to firm up, albeit slowly, as the euro prepares for a potential major plunge.
Hold all open positions and stay tuned …
All the best,
Larry
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