The general market shrugged off all news of a weakening economy this week. It’s really scary to see how steadily and persistently the stock markets are striving up. It’s the typical feature of a wave 3 in Elliot terms. Pitilessly and unmerciful and without much fuss every important resistance is being taken – so was lately the important combined daily and monthly 1510 horizontal resistance in the S&P 500 past Friday:
The derivation of the 1510 resistance can be gathered from the monthly 3 Candle GUNNER24 Up Setup in the last Sunday issue of the free GUNNER24 Forecasts… On Friday this one broke on closing base. Thus our temporarily last daily long-entry with target 1528 was triggered as well.
Technically we always have to work on the assumption that monthly resistances are able to resist heftily. After the almost felicitous spot landing at the Wednesday high of 1509.94, I was still prepared to say "good night, Vienna, good bye, rise", and I expected that the market would at least be able to retrace to the GUNNER24 Mini-Correction Target of 1487. No such luck! As visible in the daily setup above the daily 1499 upper square line resisted, and the powerful rebound from the 1497 horizontal support drove the market above 1510.
In the daily setup above we make out a clear break of the 2nd double arc - another unambiguous buy signal. Correspondingly by the Friday close we newly went long on daily base, no SL. With a 70% of probability now the next higher double arc in the trend direction will be reached.
But watch out, it would be the matter of a pretty risky trade. Therewith we only want to take along the last rise, up to the steep peak of a mighty iceberg. There’s the increased threat of a sudden slip down. The times of easy money are over, you see. The markets are at their last gasps of their ascents before a relatively severe several weekly correction will be imminent...
…the 1528 are the calculated main target of the entire upswing. That’s why by reaching the 1528 we’ll cover – market if touched – each and every one of our stock market long-engagements.
That also concerns our monthly S&P 500 long-position that’s been ongoing since 08/31. Entry was here at 1440. And when the S&P 500 reaches the 1528 we’ll also cover our open monthly long-position in the NASDAQ-100, ongoing since 08/31. Entry was at 2772.
As also derived in detail last Sunday, at the next higher important and strong weekly 14063 horizontal resistance we’ll cover the actual monthly Dow Jones longs as well:
Above you see again the weekly 5 Candle GUNNER24 Up Setup of the Dow with the covering instruction of last week…
After the S&P 500 reached the 1528, in case of two consecutive daily closings beneath the dominating daily 2*1 Rally Gann Angle we’ll go short on daily base. It will take these closings beneath the 2*1 Rally Angle after working off the 1528 to get a pretty sure confirmation that the rise will really have come to an end.
If the 1528 will not be worked off during the next 10 trading days, we won’t go short even though thereafter daily closings below the 2*1 Rally Angle succeed. Such a case should be a matter of a "relatively insignificant" correction on daily basis since with a 70% of probability in the daily time frame the 3rd double arc in trend direction is expected to be reached.
In case of a normal trend course – for the actual rise is much too steep and high, just the characteristic of a wave 3 – the market is supposed to work off the 3rd double arc within the wave 5 at 1528 not before April 2013.
Dead Slow II or the Dead Horse
The American Indian proverb says: „If the horse you are riding drops dead, it´s a good time to dismount"... It was January 6 when we last had a look at the monthly gold-chart. Then it was 1657.9, now it is at 1668.5:
The thing is dead, no energy for weeks, narrow trading range. It’s obvious that many important market participants, being unstrung, said good-bye to gold in order to join in the trend-stable equities.
Since the break of the 2012 Support Angle in December 2012 the chart-technical state in the monthly time frame has worsened extremely. Technically, according to the Gann Angle trading rules gold should have to head for the 2*1 Angle in the trend direction now. Since the trend last was rather sideways to downwards, the actual trend – sideways to downwards – is really expected to continue for the coming months thus being touched and reached the 2*1 Angle far lower than at the actual 1670 level.
Therefore, in the first possible extreme case, if the actually strongest monthly support at 1654 falls within the next 1-3 weeks, gold may still reach the 1545 in March 2013 which is the strongest monthly down magnet!
All we can ascertain additionally, regarding the analysis of January 6, 2013 is the extreme signification/importance of the monthly 1654 horizontal support. On weekly and daily base, at the moment it prevents any decline onto the touch with the monthly 2*1 Gann Angle, possibly at 1545 that is still to be expected…
In the second possible extreme case gold may not touch the 2*1 before August/September 2013 if the 1654 monthly support really resists permanently. Then it will happen somewhere between 1670 and 1630. That would mean that the little horse called gold is going to lie around – dead – for six more months, consolidating more or less before the MEGA BULL Uptrend might newly prevail after the expected touch with the 2*1 Angle.
In the medium term the 4th double arc in the weekly setup above keeps being the only thing that really counts!!
By and large gold goes on tending to be pressed down by the actual resistance function of the 4th. It may continue like this until August 2013 because not before that the 4th will temporally run out! In the extreme case through August 2013 gold may hit its head again and again on the 4th continuing its way down.
The probability of the 1654 monthly support to fall soon is increasing more and more because the Support Angle anchored in the setup above seems to have lost its support function now having mutated to a strong resistance! Five out of the last six closings were situated below the Support Angle. Technically the 1*2 Gann Angle is newly activated as a down target therefore.
The action of last week showed a test of the Support Angle at 1684 that wasn’t successful. For gold clearly rebounded from the weekly high downwards closing within the lines of the 4th. – the second time in three weeks. That certainly waters down a little bit the resistance of the 4th since we know that closings within the lines of a double arc use to prepare their breakout – in this case upwards.
Merely spoken in terms of pattern-technique, in the last 6 weeks we’ve moreover made out a consolidation at the lows in form of a Bear Flag. And according to the old trading rule "Consolidations at the lows break to the downside" also the chart technique makes us work on the assumption that now the 1*2 Support Gann Angle is going to be headed for. Compared with the last weekly gold analysis of January 20...
... the weekly target for the furthermore expected E down wave has shifted upwards to 1570!
When the expected decline is getting started??! Maybe it will take a new touch with the weekly downtrend line next week or the week after next before gold afterwards breaks the 1654 downwards definitely.
The whole downtrend ABCDE scenario won’t be denied before a clear weekly close above the 4th double arc and above the weekly downtrend line succeeds. This close is situated at 1715 for next week. In this case the 1654 monthly support would mutate to a monster. And that would impede the bears during the entire year to overcome it persistently (on monthly closing base).
A weekly close above the 4th double arc within the next 1-3 weeks would newly activate the important and strong monthly 1755 resistance as the next uptarget!
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