Weekly charts open eyes

Well, so the markets are fully on course and in balance again, after all… The stock markets are in their highest rally gear and gold as well as silver are newly – as appears proper in 2013 – in their absolute thrashing mode. It’s not directly logical nor easily to comprehend in light of the actual global economic situation. But the money-flow in 2013 is just the way it is.

Last Sunday I wasn’t yet very positive about the imminent direction either of the stock markets or of gold and silver. I recommended to wait out and see where the sideways phases and the existing divergences of the mentioned assets would be dissolving to.

With the developments of the last 5 trading days we can be pretty sure that the rally in the stock markets would continue nearly unrestrained through the year-end 2013 in spite of all the currently existing seasonality aspects and cycles. Plain text: There won’t be any hefty earth quake before the end of the year. In October the stock markets may newly weaken a little bit. But the stock investments are safe and going to be rather promising till year-end and beyond.

But what about gold and silver? It’s rumbling mightily in their charts. I cannot exclude new year-lows any more. Yet there’s still no confirmation. Though I’ve got a gold trigger mark that would make new year-lows for both precious metals very likely to happen till December 2013 in case the mark is fallen below.

Let me substantiate the introduction theses now. An intense look at some important weekly charts and weekly GUNNER24 Up Setup explains a lot!

Let’s see the NASDAQ-100 first. It is showing greatest steadfastness concerning negative seasonality aspects. It did not fall in periods when both other US stock markets we use to survey and trade dived down quite heftily but seasonality-compliant:

Last it consolidated at the highs during as many as 6 weeks before this consolidation was left upwards now. We got new year-highs – again.

I did not recognize that for long. I actually did not see till yesterday what it’s up to and how the current uptrend is working in effect.

It is joining a clearly identifiable stair-step uptrend. In the chart above the most important stair-steps are marked either as horizontal green supports or red resistances. The individual squares in the weekly up setup have a height of 409-410 index points. Correspondingly the half of a square comprises about 205 index points. Since mid-2012 the market has been following and minding these 410 and 205 stair-steps in a nearly ideal way.

The mentioned altogether 6 week consolidation at the highs has tested the important 3057 horizontal support and thus the center of the just passed square persistently. Since this test proceeded clearly positive heading out the NASDAQ-100 for new heights now we’ll have to work on the assumption that at least the next higher stair-step, the upper side of the actual square, wants to be reached. This horizontal that is technically a strong resistance is situated at 3262 index points. Here, at 3262, there is a strong important Gann Magnet, a triple magnet. It’s the intersection point of the lower line of the 5th with the actual Resistance Gann Angle and the important mentioned horizontal.

Technically the NASDAQ-100 is thus expected to reach the triple Gann Magnet at 3262 the week after next (the week from 09/23-27) then starting to retrace down or even implementing a change in trend, according to the course of the 5th double arc.

After all the 5th double arc is a matter of the absolute main target of the whole setup and thus of the entire uptrend. BUT, and this is the crucial question, will the NASDAQ-100 really and in particular persistently want to correct?

==> I don’t think that we are going to see a persistent change in trend at the 5th double arc! Perhaps there’ll be a new several week consolidation, maybe 2-4 weeks. But at the latest after this expected consolidation the NASDAQ-100 is likely to break upwards through the 5th in the course of the year-end rally heading for the next higher stair-step = 3467 till January 2014.

The resolution for this interpretation is provided by the actual weekly 5 Candle GUNNER24 Up Setup of the S&P 500. Remember: The NASDAQ-100 was to go up to 3262 within two weeks. This is a rise of about 2.6 % over the current level:

If the S&P 500 emulates this rise just approximately it will produce an unambiguous new weekly buy signal. In the important weekly setup the resistance of the 4th double arc would be overcome upwards persistently in that case! If we assume that the NASDAQ-100 will HAVE TO go up – and there is really NO doubt about it – the S&P 500 will follow generating a new buy signal. New all-time highs will be the inevitable consequence. And this new buy signal or the all-time highs will put out the 5th double arc as the next uptarget in that case. It’ll be 1880 till mid-January 2014! The probability for reaching the next higher double arc in trend-direction is at more than a 75%, corresponding to the GUNNER24 Investigations.

In case the S&P 500 closes clearly above the 4th double arc next week, above 1703, we’ll close all our existing weekly short-positions switching to long in the weekly time frame with Main Target 1880. A close above the 1703 would not only break the 4th upwards unambiguously but also crack the 1*1 Gann Angle again. Presumably some additional upwards energy would thus be generated. New all-time highs would follow inescapably!

This is the clearly favored scenario. Above at the 4th double arc a thick red course down to the Support Angle 2 is sketched in. Merely theoretically such a course is still possible since the market reached exactly the important resistance of the upper line of the 4th on Friday. If this upper line of the 4th resistance, beginning now, wants to show its claws on Monday or Tuesday, during the next 4-6 weeks the market can still fall deeply down to the Support Angle 2, following the 4th double arc…

The developments of last week in gold and silver are very grave doing a lot of harm in the important weekly up setups. Gloomy weeks with new year-lows might be waiting. In my opinion gold and silver have still two weeks to repair the damage of last week. If that doesn’t happen – bang!:

For the first time I presented to you this advanced 21 Candle GUNNERR24 Silver Up Setup in the GUNNER24 Forecasts of 08/18/2013. Please fathom there, how this setup is built up in detail and why it is the most important precious-metal setup with the most unerring forecasting function at present.

Silver has been the leader of the upturn since the June 2013 lows. With its high of 08/28/2013 silver has not only reached the uptarget we had expected (GUNNER24 Forecasts, issue 08/18/2013) of 25$ at the 3rd double arc, but after reaching the 25$ now it clearly rebounded from this "MILLENIUM-RESISTANCE". From the 0-price to the all-time high at 49.82$, the 25$ are close to the 50% Fibonacci Retracement. Let’s zoom now into the important and relevant part of the advanced 21 candle setup, the duplicated 21 candle up:

The last up-move finished exactly and precisely at the resistance of the lower line of the 3rd. The swing high was reached three weeks ago at 25.12$. At the high (24.25) last week rebounded clearly from the resistance of the lower line of the 3rd again. This performance at both highs makes clear one thing: The lower line of the 3rd is a monster resistance. Whenever we can identify a magnet that is hit to a T being visible an immediate reaction – as in this case – this magnet will be extremely difficult to overcome in future! The resistance energy is much stronger than the up-energy…

Now to the analysis of this 4th test at the 3rd double ar. Three weeks ago the 3rd double arc was reached for the fourth time. The first three tests – they all resulted negative, all three previous tries to overcome this 3rd double arc clearly failed – were comparatively much energy-richer and more promising. The first two tries to take the 3rd upwards lasted longer. The metal stayed five or four weeks respectively at the resistance surroundings. Even closings within the lines of the 3rd were made in the first two tests. In fact the third test was able to overcome again the upper line of the 3rd temporarily being rejected then after three weeks altogether.

In this current fourth test the metal is doing extremely badly. The second touch with the lower line of the 3rd is showing a hefty reaction to the resistance. There’s no price within the lines of the 3rd. Last week there was the worst down candle of all the 14 week candles that were in touch with the 3rd double arc. In addition the new hefty rebound from the lower line of the 3rd led to a clear sell signal since the important support of the 1*2 Gann Angle was virtually pulverized. According to the Gann Angle Trading Rules now the next lower Support Gann Angle is supposed to be headed for. On the tide of that also the open gap at 20.51 should be worked off!

Perhaps – the performance at the lower line of the 3rd is suggesting so – silver cannot overcome this resistance before this main resistance comes to an end temporally. In this case that means silver will have to follow the downwards oriented course of the 3rd double arc till year-end! The consequence would be new year-lows!

Gold is showing a similar sell signal on weekly base. But the presence of shadow proofs the existence of light!

Not everything is lost yet. There’s still the chance that we saw the last try of the bears to press the market down before a monster rally starts.

Reasons for that are: 1.The rebound from the swing high finished at pretty exactly 50% Fibonacci Retracement and at the 2*1 Gann Angle support. Thus we can still talk of a sane and clearly normal correction in the possible new uptrend. Moreover the market 2. rebounded visibly and with thoroughly strong energy from these supports upwards. In addition 3. in an impressive day rally the metal achieved to close above the important 1320-1322 mark. Together with the 1272 that 1322 is the important September month support. Please read up – inter alia in this issue – why the 1322/1272 has such an enormous importance for the gold price.

So the Friday course is giving tender indications to an important correction low in the existing uptrend. Still the market is showing higher lows on daily base. In addition till the end of September traditionally the markets are supported seasonally positive. So the next two trading weeks till end of September may bring altogether rising prices. But I think that at the latest from the beginning of October gold and silver will rush down!

Concretely: By virtue of the late Friday-recuperation gold is expected to rise most tenaciously during the next 10 days struggling then for overcoming the 1350-1360$ mark. It will be tough to erase the double sell candle of last week (break of the upper line of the first square and the blue arc in one go) – a powerful sell signal on weekly base. That succeeds only if one of the coming two weeks closes above 1353. In this case target would be the first double arc resistance and the 1400 mark again. At the latest from there gold is supposed to tend weakly then for 6-8 weeks. Down target is about 1200-1220$.

A weekly close below the 2*1 Support Gann Angle during the next two weeks and new year-lows in the 1120 surroundings are very likely to occur. For next week the 2*1 Support Angle will pass at 1320$. In case of a break of the 2*1 Support Gann Angle the first target will be at 1272, the next lower monthly GUNNER24 Horizontal Support, near the 61.8% Fibonacci Retracement.

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Be prepared!

Eduard Altmann