From the view of the stock cycles the stock markets’ attacks to the year highs is launched in the very weakest phase of the whole year. For the lapse from the middle of August to the beginning of October is very often shaped by falling prices giving in the stock markets distinctly in September above all. That’s why the chart techniques and the cycles are actually providing different signals.

As matters stand today, an attack to the current April 2012 highs is unavoidable being produced some new year highs next week with a nearly 100 percent of probability. By virtue of the cyclicality the final breakout upwards is supposed to fail following a major correction again in September. Then, in the fourth quarter the rally is supposed to get into its stride again going on through a fair part of 2013:


For the S&P 500, since 08/08 we are short at 1402 in the weekly time frame. We keep on expecting at least 1300 points as the target for the upcoming correction ( Stop-loss for this trade is a weekly close above 1455. In the monthly setup above, the upper line of the 3rd has us optically make out at which chart-technical mark the index is actually located… it’s always difficult to overcome important highs. The upper line of the 3rd is at 1421 for August after all, narrowly underneath the 1422.38 yearly highs.

On the basis of its strong momentum the market is supposed now to A) head for at least 1421 which is the presently strongest magnet above the actual prices and B) be able to overshoot even the April high, just because of the strong momentum.

But the crucial thing is the magnet function of this upper line of the 3rd. If the S&P 500 achieves a close slightly above the upper line of the 3rd in August, at about 1425 – which would mean that the market succeeds in holding out above the April highs permanently – we’ll have a monthly GUNNER24 Buy Signal. The natural resistance of the 3rd double arc would have been overcome in that case! And the 1528 would have been activated as the major up target definitively.

Furthermore, after a GUNNER24 Buy Signal in August, any September correction would have to turn out pretty narrow-chested – rather developing like a consolidation at the highs – and coming to an end at the surroundings of the lower line of the 3rd = 1370.

But if it turns out that the upper line of the 3rd cannot yet be overcome in August – i.e. it wants to keep on performing its resistance function – there’ll be the threat that the possible rebound energy from the upper line of the 3rd proves to be very strong thoroughly being able to get down to the 2009 Gann Angle at 1300 index points before the rally would have to start from there until the spring of 2013.

Monthly NASDAQ-100 Setup:


In the final analysis, in the NASDAQ-100 we can diagnose exactly the same as we do in the S&P 500. It’s likely to produce new yearly highs because of the strong momentum. The 2809 are offering themselves as to be the August 2012 top. That’s where the next higher horizontal monthly resistance is passing.

It’s crucial here, too, whether the market will be able to hold on above the 2nd double arc until the end of August thus generating a buy signal. Considering W. D. Gann’s lost motion I’d say that an August close above 2755 would activate the next major target at 2995 index points. If August closes above those 2755 the September correction we expect will be supposed not to fall below the lower line of the 2nd at 2663.

If the NASDAQ- 100 doesn’t succeed in maintaining the actual level falling down again the September correction will possibly turn out sharply and harshly. The down target might be the 2*1 Gann Angle. From there the market will HAVE TO turn up again heading for the final break of the 2nd double arc in the fourth quarter or definitively break it. Target for the entire rally is 2995 until spring of 2013.

Trades: In the NASDAQ-100 we’ll buy any August close above 2755 with target 2995. Furthermore we’ll buy any August close above 1425 with target 1528 in the S&P 500.

The stock market bears and the gold bugs seem to have one wish in common. Yearningly they’re waiting for the assertion of the cyclicality breaking the current trends. In gold and the other precious metals now the very strongest time of the year is coming up. Technically the triangles in gold and silver would have to dissolve upwards. That should happen next week or the week after next at the latest, but I’ve a feeling that the subsequent up move will turn out pretty weak rather developing a sideways move, and from the GUNNER24 point of view gold is apparently going to have many difficulties to newly reach prices above 1700$ soon:


This assessment is what I’m getting from the analysis of the actual weekly 13 Candle GUNNER24 Up Setup. After trading clearly above the 3rd double arc for as many as four weeks thus having left the resistance influence of this double arc, gold now has the 4th double arc as its target. But since the horizontal weekly resistance has withstood at 1624 for four weeks, amazingly no visible up impulse has been able to develop which would have been normal in case some important double arc resistances are temporally overcome.

Even though next week or the week after next a weekly close above 1624 works out such a breakout cannot go up far. On the one hand there’s a monthly monster resistance at 1655. See free GUNNER24 Forecasts of 08/12/2012.

And on top of that the space between 1678 and 1624 is a natural weekly resistance. On the other hand the weekly resistance trendline (purple down trendline) comes into play soon that will press the market down again making a new approach to the strong Gann Angle most likely to happen.

Over the market there are so many resistances that already make us foresee the further ascent up to the 4th double arc somehow. Rather tenaciously and tediously it’s going up to the 4th… - blue arrows.

Why hasn’t an up impulse arisen in the setup above after leaving the 3rd double arc? The answer is given by the actual 8 candle down setup. This setup and its magnets have mainly been dominating the price forming of the past weeks. The actual down setup is overruling the actual up setup. The medium-term downtrend is still overruling the long-term uptrend:


The last 8 weeks are slowed down by a GUNNER24 Diagonal. That one was responsible for the December lows giving support then. But its physical state changed from support to resistance. Since the May lows the upper line of the first has given visible support. The lower wicks of the weeks that rebound from the upper line are long. I.e. there are bulky buys at the lows. Not only that but also the fact that the upper line of the first has been precisely touched as many as 6 times make the first double arc be a very strong support being gold supposed now to follow the first upwards – until the spring of 2013. This would mean that the final lows of 2012 are done, and it’s going up until the end of the year. But the problem is – as analyzed above – the so far very weak rebound energy from the upper line of the first or the 3rd double arc respectively in the weekly 13 candle up setup.

Next week the 1*1 will visibly come into play – natural resistance. Technically the 1*1 can’t be broken upwards in the 2nd test that is going to follow now. Technically it cannot be broken upwards before the 3rd test. Actually gold should newly approach the 1624 next week, maybe Monday falling again down to the upper line of the first double arc then. There, at 1588 it is expected to turn up again overcoming the 1*1 finally the week after next.

In case of a weekly close above 1630 the 1*1 would have been broken finally. After happening that break the following uptarget will be the purple weekly down trendline. Then, at 1655 (strongest monthly resistance) and in the surroundings of the weekly down trendline gold will be likely to turn down again to the upper line of the first. You see, all that is most laborious and tenacious…

Summarized, primarily nor next week I expect gold to leave its triangle upwards. The reason is the constantly growing influence sphere of the weekly 1*1 Gann Angle in the down setup. And that means in the worst case that next week a rebound from the 1*1 at 1624 may become brutal. But – as analyzed above - normally the rebound at 1624 and the 1*1 is supposed to proceed moderately ending at 1588.

But we’ll also have to get ready for the possibility that as early as next week the 1624 and thus the 1*1 will break upwards. A weekly pattern very seldom to be seen is indicating that next week is going to be an up week again:


For weeks gold has been showing changing weekly closings. Up, down, up etc. Accordingly next week is supposed to close with green signs again, at least attacking the 1624. Whether that will happen at the end or at the beginning and how far the weekly candle can overshoot the 1*1 or even overcome it finally by a weekly close around the 1630 is just difficult to assess.

Since next week is going to open at 1617 it’s also possible of course that we’ll see just a very poor week up… So a weekly close at 1620 for instance would continue the regular weekly pattern without being broken upwards the 1*1 angle, nevertheless.


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Be prepared!

Eduard Altmann

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