Equities on course – Gold is trapped

The actual upwards trend in the equity markets is supposed to top by the end of May, but more likely in the first July week. The most important main targets are: Dow Jones at 14000, NASDAQ-100 at 2917 and for the S&P 500 at 1461 index points.

As analyzed in the issue of 04/01/2012 of GUNNER24 Forecasts meanwhile the markets have swung into the last correction phase. After the correction lows I expect to happen between April 21 and 26, the final approach runs to the main targets above mentioned are supposed to start.

As last forecast likewise the break of the 1*1 Gann Angle in the actual daily 9 Candle GUNNER24 Up Setup of the Dow Jones rang in the current correction “officially”:

On 04/04 the Dow closed underneath the 1*1 Gann Angle, so for the first time it traded in the bearish half of the setup, and the strongest 2012 downswing took its course. In the middle of the week the market found its first important lows of this correction bouncing upwards from a GUNNER24 Support Line. With the Friday candle the Dow is within the 3rd double arc again that is supposed to drive it back down. The fact that the market repeatedly closed within the 3rd double arc shows that we are concerned with a correction in the upwards trend. Such a conduct uses to prepare a successful break of a double arc in the trend direction. That means in this case that the next higher double arc in trend direction will be headed for with a 70% of probability if the 3rd double arc is broken significantly in trend direction, i.e. upwards (on closing price basis). The 4th double arc (not to be seen in the setup above) will pass at 14000 by the end of May/beginning of June…

Target of the actual correction continues being the strongest identifiable support-magnet in the monthly setup which is the 12,620 area.

That’s where the extremely strong 2*1 Gann Angle is passing in April. See above a chart detail from the last monthly Dow analysis of 03/25 showing the state of the 2*1. Merely theoretically the market may fall narrowly short of the monthly 2*1 angle – a correction low shortly below 12,600 is allowed as happened in December 2011, visible at the lower green-red circle. This monthly 2*1 Gann Angle has a very, very strong support power. So it’s extremely unlikely that the market bounces away now fully.

In the daily setup, at the 12,620 area an important support Gann Angle is passing, supposed to meet the market by the end of the coming week/beginning of the week after next. There, at the daily support Gann Angle the lows of this correction are supposed to be marked and then the 3rd double arc in the daily setup should be broken upwards. We’ll buy that significant break of the 3rd with target 14000.

With the March candle the NASDAQ-100 produced a long-term monthly buy signal:

The first double arc was broken upwards significantly. So we went long. As analyzed and expected, on April 1 the NASDAQ-100, too, swung into a correction due to reaching the important monthly GUNNER24 Resistance Horizontal at 2778.

With the actual correction lows of last Tuesday at 2688.21 the index touched down exactly onto the actual rally Gann Angle that is still holding up the market. But since the correction is not over temporally, and above all since no strong rebound from the rally Gann Angle happened the actual correction lows of 2688.21 are supposed to be fallen below next week and the important monthly support – the lower line of the first double arc – should be headed for at 2652. This mark keeps being the favorite turning mark:

Main target of the monthly positions continues being the 2917 that is derived from the actual weekly 5 candle up setup above. An important weekly resistance is passing there starting from the intersection of the upper line of the 3rd with the beginning of the setup.

We see that a Gann Angle was broken with the last candle. So, for the time being the down pressure is intensified, and in an extreme case within the next two weeks that may lead to the possibility to head for the strongest magnet environment at 2590. On the one hand at 2590 there is the GUNNER24 Support Horizontal arising from the intersection of the lower line of the 2nd with the beginning of the setup, furthermore there is the 2nd double arc itself, of course and the strong 2*1 support Gann Angle.

But for the moment I stick to the assessment that the combined weekly and monthly supports at 2655 represents the preferable magnet for the optimal long entry on weekly base. We’ll buy a weekly long position in case of a daily close below 2655 with target 2917. Stop-loss is a weekly close below 2495.

Gold is trapped in a cramped trading range

Since the end of February the gold market has been in a pretty cramped trading range, and unambiguously the bears are ruling the roost. All promising rally attempts are regularly brought to naught by quick, enervating sell-offs. In the daily time frame gold is in the downtrend. There are lower highs and lower lows:

The market is being in a Descending Broadening Wedge that would technically have to be resolved upwards. An upwards breakout is to be expected soon. That’s particularly true by taking into account the proximity of the perfect inverse Head and Shoulders pattern.

The seeds are sown for the bullish resolution of both chart patterns. The first target of the inverse SHS is the neck line at 1780 primarily…

But a downtrend remains being a downtrend. And the fiddling around is going on as long as the trendline above is not broken and subsequently a higher high done. Likewise there is the possibility that a lower low on daily basis will be produced as well as the possibility that we’ll see again a stronger one or two day sell-off with a following intense retracement as in the case of the left shoulder. And that would form the most perfect inverse SHS I’ve ever seen.

This caustic fiddling around in gold is caused by the position of the gold market within the 3rd double arc in this weekly up setup:

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