Neither in the US stock markets nor in the precious metals there are the corresponding signs. But in the NASDAQ-100 we’ll newly take along some profits thus increasing the cash rate. The reason is: Being the clock of the rally the NASDAQ-100 has reached its GUNNER24 Main Target on monthly basis.
Among other things about that in the GUNNER24 Forecasts of 12/05/2010 we analyzed this:
The fact that this main target was reached two months before our time target proves how strong the markets are.
Since on Friday the 5th double arc was reached to a T at 2323.43 we covered our long position by stock closing:
We shouldn’t think that the market could not carry on running. It’s absolutely possible – through the whole month of January. For it is actually in the temporal sphere of influence of the first double arc. In the setup, using two orange dotted lines I extended the sphere of influence upwards. Since the market arrived at that sphere of influence in December we’ve got the strong rally now. But this sphere of influence should really end with January.
But the experience of many years has shown that the main target is always good for releasing some "surprising" counter reactions or at least for initiating the process to form the top. Not without good reason was it defined as to be THE main target of an entire trend movement. In the past it used to be defined in advance by the market participants.
In the NASDAQ-100 it’s quite possible that the market might run upwards another one per cent to 2348 (the upper line of the main target) or even thrash out the setup completely (upper limit of the setup at about 2388).
Also the daily 8 Candle GUNNER24 Up Setup of the S&P 500 has reached its main target, the 5th double arc:
No sign of exhaustion is to be seen so far. Since at the beginning of December the market re-entered into the dominating Gann Angle corridor there have been some mini-corrections with a maximum duration of three days. The approach to the main target rather pointed to a blow off at 1330. For on Friday we closed within the 5th double arc, exactly at the upper line of the main target, and the lower line of the 5th double arc was taken as if it hadn’t been there.
You might think that the actually existing tremendous resistance isn’t really there. So far, the closing price exactly at the upper line of the main target is the only indication that we may correct. The old game might be played to drive the futures to the top on a holiday (Monday is Martin Luther King Day in the USA)… and to open the market with a monster up gap on Tuesaday and then to sell off. We’ll have to see the performance of Tuesday…anyway the break of the dominating Gann Angle corridor should produce a short signal. The question whether or not we will join trading that really depends on the reaction of the market at the 5th double arc and on the break of the Gann Angle corridor which still seems to be unlikely.
At the moment the monstrous upwards trends are dominating in the weekly and monthly time frames. Even though the NASDAQ-100 has reached its main target and for that reason we raised the cash rate, in the monthly time frames the GUNNER24 of the Dow Jones and the S&P 500 is positioned long unambiguously. GUNNER24 Forecasts, Issue 01/02/2011. Considering there the monthly GUNNER24 Up Setups of the Dow Jones and the S&P 500 you’ll ascertain that the upwards trend has rather increased with the course of January, at present. Corrections on daily basis are always possible, but actually there is a chance that the markets go up un-braked to 1378 or 12600 respectively until May 2011.
Nor in Gold und Silver the time for shorts has come – if at all…
Concerning the correction potential of gold and silver GUNNER24 puts out some very contradictory signs. That’s why we say: "If in doubt – stay out"!
At first a little "purely subjective" market consideration that leads me to the opinion:
1. The intraday reversal on Thursday was bearish because simultaneously a test of the H&S Neckline occurred. Was it the Kiss of Death?!...
2. It’s very funny that on Friday no lower low was marked within the correction because A) silver did mark that and B) as analyzed several times, in spite of all the efforts gold keeps sitting on its monster support at 1362. The longer it resists the better it will be visible for all the bears so that maybe they’ll give up soon their attempt to break it and they’ll have to do a volte-face.
3. If the lows break logically the H&S target at 1290 should be taken aim at normally.
4. That would contradict the very strong 1340 support at the monthly 8 Candle GUNNER24 Up Setup:
Even if the 1362 break a counter reaction should follow not later than at 1340. If the H&S constellation takes effect with the lower horizontal of the just passed square gold touches a very important support, and there it should turn definitely.
Besides, I always keep in mind next Monday being a holiday which makes the analysis that difficult. As mentioned above the holidays are willingly used for head fakes. That’s why we’ll have to consider some different scenarios on daily basis.
Bearish outlook which is rather pointing to 1340: The daily 2 Candle GUNNER24 Down Setup:
This setup is showing a normal, relatively plane correction which should end at the 2nd double arc, as analyzed last week. But instead of the 1327 as to last week it will rather be at 1340! And: As supposed last week the 1*1 Gann Angle could not be overcome. The positive aspect is the fact that it could be overcome at least for a short time on daily basis. That makes the correction course look planer. That’s to say the correction shouldn’t really produce a sell off but move downwards in the gray backed Gann Angle corridor. A break of the 2nd double arc puts out the H&S target and the 3rd double arc at 1290 as to be the target. But we are not there by far. There’s also an extremely bullish point of view:
The first double arc should resist and the correction would have ended if A) the market participants don’t succeed in producing a closing price within the first double arc or a lower low on Monday and Tuesday and B) at the upper line of the first double arc a visible spike takes place on Monday or Tuesday. The 1362 will have resisted in that case.
Silver daily:
Simply the fact that I present you an up setup for daily silver shows how contradictory the present correction in the precious metals is. The correction here is looking like a boringly normal correction in an upwards trend. The 3rd double arc is being tested back at present. But here there’s a problem similar to the one in gold.
On Friday a Gann Angle broke and was tested back with the Fridays top, so it actually looked bearish seeming to head for the 27.70 or the 1*1 Gann Angle, respectively. But that doesn’t have to happen for here again the price is still backed by the upper, chart-anchored horizontal support. If it breaks on Monday/Tuesday the 27.70 being a low on Wednesday would be an ideal point for ending the correction. It’s a triple price and time magnet. The clear break of the 1*1 Gann Angle on closing price basis is an unambiguous short signal!
Be prepared!
Eduard Altmann