Ten four now, isn’t it?

The money-printing contest of the central banks is opened. On Thursday Fed chairman Bernanke announced the unlimited stimulus program – QE3 – after the EZB president Draghi had done the same. The perspective to the actually unlimited liquidity is going to make the investors worldwide take refuge still more in tangible assets like stock shares and commodities. That’s sheer inflation.

Last week the S&P 500 has risen to the highest level since about five years. The main target for this rally is 1528 index points until spring 2013. Now the target is inevitably to be reached:

In the GUNNER24 Forecasts of 09/02/2012 we pointed to the convenience to buy every September close above 1430. A monthly close above the 3rd double arc – that means at least 1430 – wouldn’t only break this arc but the simultaneous re-conquest of the 2*1 Gann Angle would be a confirmation of the buy signal. A so-called double buy candle would arise. In the monthly time frame that would be a pretty seldom confirmation signal for the absolutely certain continuation of the uptrend… Please pay attention to the resistance horizontal at 1462 in the chart above. Technically this is a very strong monthly resistance that is supposed to drive the market into an - at least – perceptible correction on daily and weekly basis now.

As analyzed in the issue of two weeks ago already we’ll go long with a tranche if September succeeds in closing above 1430.

It’s most surprising that the uptrend is showing SUCH a power. The way the S&P 500 marched through the natural long-term resistance of the 2nd double arc practically without any correction is a sign of brutal strength. By the Friday close we were obliged to cover our shorts that had been triggered at 1402 points since a clear break of the 2nd double arc occurred. At the same time the marked closed above the long-term resistance Gann Angle. So, in the weekly time frame we make out a double buy candle now (simultaneous break of the double arc/Gann Angle) that is going to continue maintaining the market up and forcing it upwards.

The next up-target now is the 3rd double arc in trend direction. Until February the 1528 points are supposed to be reached.

Optimum long-entry on weekly basis: Certainly the re-conquest of the resistance Gann Angle is a sign of clear strength as on the one hand the market is extremely overbought and on the other hand the price is at the important 1462 resistance that – as analyzed above – is expected to drive the market into a minor correction, but the market is likely to fall back into the long-term Gann Angle corridor (above limited by the resistance Gann Angle/below backed by the super strong 1*1 support Gann Angle). So the actual weekly candle might thoroughly be a matter of a false signal, an exaggeration, a false breakout of the existing chart pattern…

Technically a possible correction should maximally go back to the upper line of the 2nd double arc, about 1425. Now we’ll consider the performance of the next two weeks going long there with a weekly position if the 1425 are confirmed as a possible price target...

The optimum long-entry (best because pretty free of risk) is certainly an entry at the 1*1 support. In the face of the threatening possible mini-correction it’s not likely to be reached. But undoubtedly someday in autumn it will be headed for again, and that’s where a killing will have to be made!

Is the actual double buy candle able to drive the market without a rest to the next higher weekly resistance at 1500? It’s a very clear yes. But I personally don’t take the risk of a long-entry here at 1465. The risk/chance relation is too bad. It’s better to await the first correction to jump onto the moving train from a lower level.

Inspired by the QE3 the precious metals, too, continue their altitude flight

Last week I still had certain reservations whether the actual gold up-trend wasn’t a matter of a counter-trend rally in the bear market. That’s why we cautiously covered our weekly long-position at 1760 and a monthly long-position at 1755 (http://www.gunner24.com/performance/). The strong weekly close above the extremely important 1766 Gann magnet is now dispelling my last doubt:

Until spring gold will trade far above 2000$!! What we’ve seen during the last weeks is but the beginning of something very, very big. This is the reason:

By the weekly close of 1773.50 gold overcame the dominating monthly downtrend line pretty clearly. That was the first step for taking this trendline now on monthly basis as well. For the fourth time in the whole bull run gold is trying the break. The first three tries were rejected harshly each.

According to W. D. Gann and the rule of 3 and 4 the final break of a resistance sometimes happens in the third but mostly in the fourth attempt. And now it seems that the fourth attempt will be crowned with success. If this fourth attempt succeeds – with a September close above about 1780 – the up-trend will accelerate again very strongly, because of the seasonality probably continuing until April/May 2013 and – as mentioned – not topping before prices far above 2000$ will have been reached.

Technically a September close above 1780 shouldn’t be any problem. The dominating weekly 5 Candle GUNNER24 is suggesting so:

The weekly close above the 2nd double arc now activated the 3rd double arc as the next up-target. The 1835 are supposed to be reached pretty rapidly within the next three weeks. At about 1800 above the actual price there’s an important horizontal resistance, also psychologically important, that technically isn’t expected to be a problem however.

But with the swing highs at 1780 the metal reached a cross resistance now (resistance Gann Angle/horizontal resistance) that should lead to a test of the 2nd double arc. Correspondingly, by the middle of next week the upper line of the 2nd at 1758 might be reached, or the lowest possible correction target on daily basis at 1751 – at the strong square line support – might.

But it’s more likely that only the 1758 want to be reached. Next week we’ll open a weekly long-position there. We’ll place a buy limit for the weekly position at 1758 MIT (market if touched).

At the same time at 1751 MIT (market if touched) we’ll put a buy limit for the daily position into market. If the correction targets are not reached next week even though we want to be in the party unconditionally, we’ll go long with a daily position in case of any close above 1775.

Would you, too, like to profit from this possible monster-wave in the precious metals on a large scale? Do you require a service that monitors, controls, analyzes and signals for you all the important moves in gold and silver? If so, go ahead and order just right now the GUNNER24 Gold Trader!

Be prepared!

Eduard Altmann