Just a quick update here so you can see what I am seeing. Cycles continue to point lower for the metals and the stock market, into early October.
In addition, the technical chart action is bearish and the trading is heavy, with bearish patterns persisting. Take a look.
First gold. This is 240-minute or 4-hour chart of the December gold futures contract.
Gold is clearly in a downtrend, even on a 240-minute basis.
In addition, there are still a record number of long-speculator futures contracts in the market.
That’s not bullish. It’s bearish. It means there is a huge oversupply of potential selling that could occur at any time. Speculators are the first to run for cover and the most trigger happy, ready to dump positions and even reverse them on a moment’s notice.
Once the $1,310 and then $1,305 levels are taken out – assuming they are – gold could easily plummet to $1,280 and below, to $1,250 my target for a secondary major low.
Now silver: Also a bearish technical chart pattern and set up.
Silver is bound to be more volatile than gold, but it’s clearly in a downtrend, trading heavy and likely headed to the $17.50 level or lower into early October.
Now the Dow Industrials:
Also bearish chart pattern and trading heavy. A close below 18,000 – while not a technical sell signal on my systems …
Would cause further psychological damage to the market.
With cycles pointing lower, major support will come into play from 17,000 to 17,200 …
BUT, should 17,000 give way – entirely possible – a move down to 16,400 could easily unfold.
Hold all positions and stay tuned.
All the best,
Larry
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