40 Handle Bounce

On Tuesday the S&P futures traded down to 2068.75 and two days later the S&Ps traded up to 2114.75, some 40 handles higher. Markets were extremely oversold on the daily charts, the key level to watch is the 2072 level. At one point the market was actually down for the year but of course that was short lived and with the DOW closing today up 39 points at 18039, the market is really in no man’s land. I sound like a broken record as I have been stating that there are gaps below the market to be filled and I foresee these gaps being filled anywhere between the next 8-10 weeks, setting up for a good year-end rally.

Oil was down over 80 cents today, again hitting a brick wall at the 61 level. Oil needs to hold above the 55.74 level and if that gets broken we will get a sell signal on the oil market for probable retest of the mid 40 range.

Gold was down over 5 dollars today trading as low as 1162 at one point before closing at 1181.50. The print low this year for gold was 1135.30. I think we will get one more pushup in gold before we head back down. I stated that I was looking for gold to trade between 1190-1200 where a negative pattern is setting up. Yesterday’s high was 1191.80 and today the low was 1174.80 so gold dropped 17 dollars. Again the pattern is almost complete for another push lower.

My course Pattern Recognition 101 is almost complete and I will keep you posted if anyone has any questions please call 203-617-4026

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