IS GOLD READY TO SKYROCKET?

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TODAY'S ACTION

A clear short signal was given between 1:30PM-2:30PM. It was the breakdown in the wedge pattern. There was no signal to cover today. The decline was sudden and painful for those who were unable to react quick enough. You'll have to start getting with the program -- things are going to get a whole lot more quicker, both declines and future rallies, and if you can't react in time then every minute may cost you considerable damage. Therefore, I recommend that ONLY full-time traders actually trade. There's too much going on for the folks who do not have immediate control over their positions. Makes sense, doesn't it?

S&P 500 (SPX) - 1-day

Below is a 3-day chart of the S&P 500. You can see the numerous triangles (both ascending and descending), a neutral range and a wedge, all in 3 days. The action this morning broke down yesterday's rally attempt and, in this chart, formed a bearish flag. This is the reason why I stress the need for multiple time frames. This will give you the perfect intra-day entry point. Listen to me and just do it!

S&P 500 (SPX) - 3-day

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THERE WILL BE BLOOD

Us.

And the World...

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TODAY'S BREAKOUTS & BREAKDOWNS (10-9)

What we saw today was a continuation from the indecision signal that was given yesterday – the market was simply taking a breather before resuming its trend. You can’t blame it on the shorts because they just got started today and they wouldn’t cover today. I know I didn’t. What seems to be going on is that funds of all types have having trouble meeting redemptions and withdraws, now bought on a large-scale by disgruntled investors. People have lost nearly $3 trillion in a matter of days, and there is no question that people are demanding to have their money pulled out en masse. Fear produces panic, which is the start irrational hysteria, in this case, selling.

This will go on for quite a bit. When we do get a reactionary rally once we hit a major capitulation point, it will be sharp and dramatic, but longs will still be selling during the duration, because panic doesn’t subside in a few days or overnight. In order take advantage of this situation, identify the day with capitulatory volume (I hope it comes tomorrow – after all, which longs are crazy to hold over the weekend) and go long and don’t look back. This rally will be sharpest rally that anyone of us will have seen so far in this bear market. Once the rally is underway, the market must make a decision on whether we will start a 4^th primary leg down (this one will be even scarier than this one). We shall see in due time, but I’m still looking for my overdue rally.

When I reference “oversold”, it is only a technical term. The market’s true value, right now, indicates that the levels we're at, right now, are correct. I find it interesting that people who are aware of the catastrophe (which is everyone), are still expecting or wishing that their portfolios to go back up. Sorry, the market is always right.

No breakouts today. You can expect any on days like today. We had 13 new highs today and 2,862 new lows. On the NYSE, 90% of stocks declined and only 8% advanced. Declining volume on all exchanges are around 90% of total volume. These are signs of panic-driven selling and forced liquidation and this trend has gone on for a long time.

As for breakdowns, we have too many. I estimate that my article would be over 4,000 pages long full of breakdowns, but we’ll only over 10 today. The important lesson here is the same as it was on my past three articles: don’t let your stock end up on my list. Comb through your stocks and see if you see any of same patterns forming. Those are very clear warnings, and have provided dozens and dozens of examples with comments so far. Every single day matters – one day can reverse the entire trajectory of a stock. You’ll notice that the majority of major losses in anyone’s portfolio can be avoided. Capital preservation starts with prevention!










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