The stock markets should rise - at least for two weeks

The markets managed to defend the important low of 05/25. Exactly at the end of the temporal influence of the 3rd double arc the markets came to their low. From now on the trend is rather expected to go up. In day trading we are turning from short to long.

The situation: For several weeks, the S&P 500 clearly followed the red 3rd double arc you see in the 13 Candle Daily GUNNER24 Up Setup. That was another impressive demonstration of how pitiless the influence of resistance double arcs can be. Every recovery try failed - either because of the upper or the lower line of the double arc... until last Tuesday, exactly at the end of the temporal influence of that double arc, at 1053 the last battle for the time being was done - as we had supposed (GUNNER24 Forecasts Issue 06/06/2010):

The orange dotted support diagonal you see in the Setup resisted on closing price basis, and for the next days, it should offer some support. At the moment, the bulls win setting the trend to lead the indexes rather upwards for the next two or three weeks. You shouldn't expect true pyrotechnics of prices, the space between the third and the fourth double arcs is mostly marked by considerable and surprising price moves in both directions, but as I said the trend goes rather upwards.

Let's have a closer look to this 2 Candle GUNNER24 Down Setup:

In this setup the main target was hit exactly. This setup says undoubtedly: “We will rise”! The first target is the 1*1 Gann Angle that should not be broken at the first attempt. Exactly at the Tuesday low the new actual GUNNER24 Up Setup begins. On Thursday we opened little long positions on daily basis at 1086. SL is 1042. A 5 candle or maybe an 8 candle up setup is on the way. Next week, it will be important to see whether the markets resist on Taylor. In case of the sequence Monday and Tuesday up, Wednesday sideways, Thursday down and Friday up, the long term up trend could be resumed again!

A brief look at the weekly situation at least makes possible that opportunity. That is also the reason for our first long position on daily basis; even though - as you know - we rather reckon on a sideways move of the markets with new lower lows through the end of July (GUNNER24 Forecasts, Issue 05/30/2010). For we have to remember when a counter trend within the upwards trend should have come to its end:

1. At the lower horizontal of the first square. If that was really the “absolute” turn that would mean the markets are extremely strong. It would be the matter of a very weak counter trend reaction within the upwards trend. But I'm not really working on that assumption. Next week we should go to 1117, then we'll see. The maximum target for the following 2 to 3 week up swing will be close to 1140 (high of the expected June trading range, GUNNER24 Forecasts, Issue 05/30/2010).

2. At the first double arc: Even a new submerge to the targets at 1000 to 1010 we calculated last week would still point to a strong upwards trend that would not be endangered in no way.

3. At the second double arc: The second double arcs are mostly the last rescue anchors....

The NQ continuous contract has defended its lows, as well. The forth attempt to break the 1*2 Gann Angle was rejected. We sketched the expected price movement in the 5 Candle GUNNER24 Up Setup. The blue arc should be reached definitely in the course of the coming weeks. In case of its break the bull party will get started really. Well, the upwards targets which result from that break are considerable.... 

We've got to consider the 1*1 Gann Angle in the following GUNNER24 Down as to be the second line in the sand.

Gold:

As expected, the actual gold futures contract is marking an all time high again, at 1254.5. Also, on daily basis gold was performing as expected (hint to Taylor and to the all time high within the GUNNER24 Forecasts of 06/06/2010), all the same, some mighty resistances continue in the markets which for the time being have prevented a rapid breakout.

At first, let's have a look at the important and dominant Elliptical GUNNER24 Down Setup that is determining the exhaustion move in gold by its ruling 2nd double arc. For all the new readers: Here you may read up where we derive this GUNNER24 Setup from:

Last trading week, too, the predicted low was marked exactly at the dominant 2nd double arc again. We may sketch in the next little green square. The objective low for next week is lying close to 1226 being supposed to offer another excellent long entry. Also, the setup-anchored Gann Angle seems to have been overcome and worked off. Being “worked off” in this case means that it seemed to be broken unequivocally by the Tuesday all time high at 1254.5, but through Thursday it was tested again and not before the Friday final price it closed above it. So it should be broken finally.

Since the market is always right, naturally, we will have to respect the new SL at 1220 whatever happens. If that mark breaks at closing price basis we will have to work on the assumption that there is a mistake in the GUNNER24 Setup. Also in the weekly Elliptical GUNNER24 Down Setup a longer dwell on 1216 on Monday or Tuesday would be a great warning sign indicating that something with the GUNNER24 Forecast is wrong, since the allowed week low should not extend the 1226 by more than two to maybe three points downwards.

The reason why the all time high was really retraced extremely is on the one hand the mighty resistances in all the higher time frames which were worked out in the GUNNER24 Forecasts of 05/16/2010:

1. Monthly resistance at 1239.

2. Weekly resistance at 1232.

3. Resistance on daily basis at 1247.

That resistance at 1247 is extremely important. If we reach a day closing price over 1247 next week we would have green light for the final phase of the exhaustion move. Target 1320 within two weeks!

The following weekly setup makes clear how close we have come to the final target of that move: