We are selling off a little in both gold mining shares and the stock market today. SPX support is 827 tomorrow. We are trying to bounce off of a declining tops line and may do so again tomorrow before resuming the up trend.
We will probably exit our longs on Friday in both markets and initiate new short sales.
Tuesday, November 25, 2008
Nov 25, 2008 Pre-Market Commentary
Futures are pointing to still more strength this morning in the stock market. An ideal set-up would be to tag the 50 day moving average within the next few days, top and then turn lower into mid to late December. That top point would be about 970 SPX.
Ideally, we should top on the 16 day cycle top due tomorrow, but that can vary some. Last cycle ran 15 days and before that 17 days. The moon is new both Thursday and Friday and that suggests a reversal point: in this case an important top Friday?
Next: how low is anybody's guess. Some are saying we hit 6000-6500 on the Dow Jones Industrials before bottoming. It remains to be seen. All I know is we make another lower low in December and then rally strongly into around mid February.
Gold stocks ran higher and then turned back from the highs late in the day. GDX tagged near to 26 before turning back. Ideally, we see the 28.90's by Monday next week and then turn lower.
While the 8 year cycle and the seasonal trend is turning up into about the third week of December for gold stocks, the lower projections for the stock market for December has me concerned for the mining sector.
As I have been saying, this is trader's market right now and not a buy and hold market even for gold mining shares. The e-wave outlook for GDX suggests we are seeing what may be an a-b-c type of rally off the Oct 24/27 bottom. If so, we may see lower prices into December along with the stock market.
We remain long right now both the stock market and the gold mining shares with our finger on the trigger. When it is time to short, the odds favor the stock market over the gold mining share sector based simply on seasonals and cycles.
Ideally, we should top on the 16 day cycle top due tomorrow, but that can vary some. Last cycle ran 15 days and before that 17 days. The moon is new both Thursday and Friday and that suggests a reversal point: in this case an important top Friday?
Next: how low is anybody's guess. Some are saying we hit 6000-6500 on the Dow Jones Industrials before bottoming. It remains to be seen. All I know is we make another lower low in December and then rally strongly into around mid February.
Gold stocks ran higher and then turned back from the highs late in the day. GDX tagged near to 26 before turning back. Ideally, we see the 28.90's by Monday next week and then turn lower.
While the 8 year cycle and the seasonal trend is turning up into about the third week of December for gold stocks, the lower projections for the stock market for December has me concerned for the mining sector.
As I have been saying, this is trader's market right now and not a buy and hold market even for gold mining shares. The e-wave outlook for GDX suggests we are seeing what may be an a-b-c type of rally off the Oct 24/27 bottom. If so, we may see lower prices into December along with the stock market.
We remain long right now both the stock market and the gold mining shares with our finger on the trigger. When it is time to short, the odds favor the stock market over the gold mining share sector based simply on seasonals and cycles.
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