Choppy Days Ahead
On Friday the DOW was down slightly and the NASDAQ was up slightly on the close. I’m not bullish up at these levels. Today closing the month of August, the DOW was down 114 points and the S&P was down over 20 handles. I’m looking at the month of September to have a lot of choppiness and volatility. I am 75%-80% sure that the lows are in for the year. I do not like the patterns on the daily charts, so I believe there will be backing and filling up to a higher low. I believe the gaps below the market in the 15500-15800 range will be filled and create a higher low before we trade higher into the fourth quarter. I expect a lot of the losses for the year to be erased and maybe inch out a single digit gain for the year. I am looking to buy home depot on the next pull back. I am also looking at the ETFs QQQ, SPY, IWM, and DIA to follow the market as it moves higher.
Oil was up over 2.5 dollars today. In three days oil has rallied 10 dollars. I stated I was looking for a pullback in oil to go long. I think the lows of the 38.5-38.71 are in for at least a month. Today oil is above 48, having rallied very sharply off the lows. Now I am looking for a pullback and a buying opportunity before it goes higher. This is a trading opportunity on the short term however I am still bearish on oil in the long term.
Gold was up slightly today. I am not bullish on gold. I don’t think the Federal Reserve will increase interest rates so gold should have some underlying strength. If the Federal Reserve did raise interest rates gold should go down. I do not see gold going higher, the stochastics are very oversold and starting to turn up on the daily charts. There will potentially be a move to the 1145-1155 range. I don’t see gold going higher than 1160, however if that did happen I would see it as a selling opportunity. Gold stocks such as Newmont Mining (NEM) and Barrick Gold (ABX) were down on the day while gold was slightly up. There is a divergence between the commodity price and stock prices.