It’s been a lackluster week so far, as all markets have their eyes still glued on the Greek crisis.
That said, the good news is this: We did NOT get a cycle inversion in gold. Gold failed to move any higher after last Thursday’s pop higher, and failed to close above the $1,212.70 level.
Instead, gold started sliding right back down, reaching an intraday low yesterday at the $1,175 level.
This is very good news. It means the gold market is acting heavy, with sellers dominating buyers. More importantly, my latest model update shows that the current trading cycle for gold is stretching, probably due to the uncertainty surrounding Greece.
You can see the chart here. Notice the arrow and how the June 24 cycle date has now stretched out pointing to a July 1 low.
As a result of the failed cycle inversion and the stretching of the cycles, I now expect gold to move still lower into the first of July.
That low will hopefully come in around the $1,110 to $1,130 level.
Then, we should see a bounce into September, followed by what should be shaping up as the final low – well below $1,100 – in mid-November.
Therefore, I want you to hold the July GLD put options. If anything changes, I will act quickly to either recommend you take some premium off the table, outright … or roll the July puts forward in time.
Meanwhile, nearly all other markets have their eyes glued on Greece as well, with tight trading ranges in the agricultural markets, and in stocks.
Overall, the U.S stock market is catching a bid on the fear that Greece will default, but my indicators continue to tell me there will be no breakout to the upside until the Dow Industrials close solidly above the 18,500 level.
Hold all positions and related stops. More updates coming later this week as I see more action unfold.
Best wishes and stay tuned …
Larry
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