What a Weekend....The United States Has Been Marked Down!

What a weekend!! S&P marks America down to to AA+. That bombshell comes on top of everything else that is happening like the markets crashing and Italy imploding. But you know what, it is also a time of great opportunity if you follow our Trade Triangle technology.

Let’s see how the markets performed last week. Out of the six markets we track every trading day, four markets were in negative territory for the week. The two markets that did not end up in the minus column were gold up 2.25% and the dollar index which was up 1.06%

The percentage loser for the week was crude oil which lost a massive 9.21% and is now officially in a bear trend according to our Trade Triangle technology. The S&P500 was close behind with another negative week which saw this index shed 7.18%.

Let’s take a look at the charts, because unlike politicians, pundits and gurus, they tell you what is really going on in the world.

So here’s what happened last week in the major markets....

S&P500: change for the week: -7.18%
Monthly Trade Triangles for Long Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short Term Trends = Negative
Combined Strength of Trend Score = – 100

Silver: change for the week: -3.38%
Monthly Trade Triangles for Long Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short Term Trends = Negative
Combined Strength of Trend Score = + 65

Gold: change for the week: +2.25%
Monthly Trade Triangles for Long Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short Term Trends = Positive
Combined Strength of Trend Score = + 100

Crude Oil: change for the week: -9.21%
Monthly Trade Triangles for Long Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short Term Trends = Negative
Combined Strength of Trend Score = – 90

$ Index: change for the week: +1.06%
Monthly Trade Triangles for Long Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short Term Trends = Positive
Combined Strength of Trend Score = + 65

CRB Index: change for the week: – 4.46%
Monthly Trade Triangles for Long Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short Term Trends = Negative
Combined Strength of Trend Score = – 90

Great Video: How to Spot Winning Trades

Welcome to the Bear Market

From Gold ETF Trader contributor Adam Hewison.....

Ladies and gentlemen, the market action yesterday was real. Please be aware that we have started on a bear market. As we have pointed out in our previous updates, we were looking for a move to the downside. That has now happened with all our indicators firmly in negative mode.

Most folks who are not in their 60s do not remember the bear markets of the 70s and 80s which caused a tremendous amount of pain for investors. It seems as though we just kicked the can down the road for the last time. The markets are bringing common sense back and they will find a solution for the economy.

President Obama came on the TV today to reassure everyone that it was not his fault that the stock market was down, it had to do with Europe, the tsunami in Japan. Mr. President we are and have been in a global economy for years. It’s too bad that Ben Bernanke and you don’t understand that.

Folks who saw their 401(k) and IRA retirement accounts decimated in 2008 are having a déjà vu moment. In the last 10 days the S&P 500 has lost over $1 trillion and we expect it will lose more. A simple solution to get America running again is to cut corporate taxes to 25%. Money will pour in, corporations will start hiring again and start building business. Corporations are the ones that create business and pay taxes in this country. It’s not the government that pays taxes.

So, President Obama will you please help give businesses the environment to thrive in, less regulation, less taxation? This is the only way for the country to get out of this recession.
The key element which is overriding everything right now is the current market psyche....Scared.

Last night every TV and cable show’s lead story was the market crash. If the market closes lower today, everybody will be frantic and worried about their investments over the weekend which means we’ll probably see a continuation early next week to the downside.

The equity markets are getting close to a 61.8% Fibonacci retracement level of 1148 for the S&P 500 index. We expect that this level will be reached. We would expect to see some profit taking at that area and a modest retracement back to the upside. That is not to say we are bullish, it just means we going to see some profit taking coming into this market.

I would like to thank everybody for their positive feedback! We are thankful we can help you muddle through this extremely volatile time in the markets.

So let’s go to the 6 major markets we track every day and see how we can create and maintain your wealth in 2011.

S&P 500

Monthly Trade Triangles for Long Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short Term Trends = Negative
Combined Strength of Trend Score = – 100
Watch Video for update.

SILVER (SPOT)

Monthly Trade Triangles for Long Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short Term Trends = Negative
Combined Strength of Trend Score = + 55
Watch Video for update.

GOLD (SPOT)

Monthly Trade Triangles for Long Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short Term Trends = Positive
Combined Strength of Trend Score = + 90
Watch Video for update.

CRUDE OIL (SEPTEMBER)

Monthly Trade Triangles for Long Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short Term Trends = Negative
Combined Strength of Trend Score = – 100
Watch Video for update.

DOLLAR INDEX

Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 65
Watch Video for update.

REUTERS/JEFFERIES CRB COMMODITY INDEX

Monthly Trade Triangles for Long Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short Term Trends = Negative
Combined Strength of Trend Score = – 100

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Will Rhind: Why Gold Is Skyrocketing to $1,700

Will Rhind, head of U.S. operations for ETF Securities, discusses what is leading the gold charge to $1,700 an ounce and if silver will play catch up.



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Gold and the QE3 Ship – Are Both About to Sail?

From Gold ETF Trader contributor David Banister at Market Trend Forecast.....

Back in Mid-May of this year we had a big rally in the Dollar and Gold was correcting hard. There was a bit of Dollar Bull hysteria at the time which I felt was quite unfounded. I wrote an article entitled, “The Dollar Bull Monkey Dance Will Soon End Badly, QE3 Next?” You see, the collective herd psychology at that time, just a short ten weeks ago, was that Gold would drop hard at the end of QE2, and The Dollar would of course rally as high as 82, maybe more against the weighted index.

The dollar has dropped hard since mid-May as I expected and Gold has continued to rally as well. I had forecasted $1627 for Gold back when we were under $1,500 and last Friday we closed at $1627 on the nose! During the mid May time, most disagreed with my QE3 forecast, and probably still do but I think the ships is soon leaving port. This could blast Gold up to a target of $1805 on the high end and certainly into the low 1700’s to the $1730 per ounce range.

Gold has had a powerful 5 wave rally (Elliott Wave Theory) since the October 2008 lows of $681 per ounce, and certainly one could argue that a correction would make sense fairly soon. However, the fundamentals for Gold are only getting stronger as we have inflation climbing at an 8-9% real rate and interest rates continuing to drop. This is creating a “negative” real interest rate environment amidst a continuing weaker US dollar. Hence it is hard fundamentally to argue against Gold at this time, creating difficulty in forecasting the intermediate highs and lows.

With that said, assuming QE3 or some form takes place soon then my $1805 target is quite likely to be hit before we can look for any meaningful correction in the precious metal complex. With the ISM manufacturing index turning down sharply as reported this morning and other economic indicators and GDP report rolling over, a QE3 ship horn is likely to sound soon. Below is my latest chart dated July 22nd with Gold at $1599 at the time, outlining the likely interim moves in Gold using my crowd behavioral methodology that I employ at my forecasting service.

The combination of crowd behavior and fundamental analysis often delivers stunningly accurate forecasts in advance on the SP 500, Gold and Silver at TMTF. Consider signing up for our regular updates and use our 72 hour coupon code at Market Trend Forecast

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Oil N Gold: Gold Has Further To Go!

Commodity price movements continue to be directed by macroeconomic concerns in the near term. Gold jumped to a new record high of 1637.5 on Friday as US growth missed expectations. The yellow metal's rally to new highs in 3 out of the past 5 days signaled market worries over uncertainties. The debt ceiling debate in the US has dominated the news headline for the whole week. The latest development is that House speaker Boehner's revise plan was passed in the House but was defeated in the Senate.

Meanwhile, the majority Senate leader Reid modified his proposal, incorporating Minority Leader Mitch McConnell's '2-step' process (the loan will be provided in 2 installments of 1.2 trillion, one immediate and another when the nation is near the debt limit again) to raise the debt ceiling. Economists generally do not expect the new plan to be the resolution for the debt problems.

On Friday, market sentiment was deteriorated further as US economic growth disappointed in 2Q11. GDP expanded an annualized +1.3% in 2Q11. The market had anticipated a strong expansion of +1.7%. For the first quarter, GDP growth was revised lower to + 0.4% from +1.9% estimated previously. Economists have revised down their forecasts for this year and 2012 after the report.

For example, Bank of America Merrill Lynch cut US' growth by -0.6% to just 2.3% in 2012 and pushed back the first Fed hike to 2013. Barclays Capitals reduced the country's growth forecasts to +1.7% and +2.4% for 2011 and 2012 respectively.....Read the entire article.


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Just Three More Days To The Debt Deadline and What is Warren Buffetts Solution?

Just three more days to the debt deadline. I’m guessing that it is an artificial deadline made up for political reasons. I am positive that this is just an arbitrary date that some policy wonk came up with to get everyone up in arms about doing something with the debt.

I believe Warren Buffett had the best idea on how to end our debt problems. Here is what Warren had to say: “I could end the deficit in five minutes. You just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election.” Way to go Warren!!!

Well, we have made it to the last day of the trading week and the last day of the trading month. The equity markets are, as of this writing, sharply lower for the week and also the month. Gold and Silver on the other hand, are sharply higher for the week and the month.

As we have been indicating, we felt the equity markets were rolling over to the downside. Technically we are getting closer to pulling the trigger on our major monthly Trade Triangle which sets the trend for the equity markets.

Now let’s take a look at what the markets are telling us and the direction they’re taking on this last trading day of the month.

S&P 500

Monthly Trade Triangles for Long Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short Term Trends = Negative
Combined Strength of Trend Score = – 70
Looking at the monthly S&P 500 index chart, a close around current levels would be the lowest close we’ve seen in this index for the past 6 months. The monthly PSAR comes in at 1256. As we have stated many times before, this is a line in the sand level that if broken would indicate further downside action.

SILVER (SPOT)

Monthly Trade Triangles for Long Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short Term Trends = Negative
Combined Strength of Trend Score = + 85
Silver is closing out the month with a gain of over 15%. The action continues to be positive and we expect this market to trade to the $43 level basis the spot market.

GOLD (SPOT)

Monthly Trade Triangles for Long Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short Term Trends = Positive
Combined Strength of Trend Score = + 100
In July, gold moved up over 8% and in doing so hit new all-time highs against the US dollar. The trend remains positive with all of our Trade Triangles positive and we have an intermediate target zone between $1640 and $1650.

CRUDE OIL (SEPTEMBER)

Monthly Trade Triangles for Long Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short Term Trends = Negative
Combined Strength of Trend Score = – 75
For the month of July, crude oil closed essentially unchanged. We still feel that this market is building an energy field to move higher. We want to closely watch this market in the coming days and weeks and look for a turn to the upside.

DOLLAR INDEX

Monthly Trade Triangles for Long Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short Term Trends = Positive
Combined Strength of Trend Score = – 55
The dollar index was essentially flat during the month of July with a loss of 0.62%. For the last four months, this index has been moving sideways unable to break out of its trading range. Eventually you will see this change and a stronger trend developing.

REUTERS/JEFFERIES CRB COMMODITY INDEX

Monthly Trade Triangles for Long Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short Term Trends = Negative
Combined Strength of Trend Score = – 75

One of the reasons we eye this particular index so carefully and closely is because it is the indicator of inflation and deflation. In the month of July, this index closed up over 1%. The 350 level is the key level down to watch on the upside.

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Equities Are Hit With Panic Selling, What Does It Mean?

From Gold ETF Trader contributor Chris Vermeulen......

It was an exciting trading session Wednesday to say the least…..With all the uncertainty floating around it is causing the stock market to be more volatile than normal. It seems like every other day there is some big headline news causing either strong buying of stocks or strong selling to take place. It’s this type of price action which spooks the average investor causing them to panic out of positions at key support areas just before a continued move higher.

I like to focus on the market when I see extreme buying or selling taking place. During times of extreme buying or selling in equities, investors are reacting on emotions rather than logic and that’s when I benefit from everyone rushing to the door trying to get rid of their positions at any price they can get.

Let’s take a look at what the market is telling us right now…...

SPY – SP500 Index Exchange Traded Fund – Daily Chart
In this chart you can see my custom green indicator at the bottom. I use this to measure fear in the market. When this indicator is trading above 5 I know the masses are unloading stocks as quick as they can in pure fear that a market collapse is about to take place. But the biggest thing I learned trading over the past 12 years is that when everyone is doing something its best to skip the trade or start looking for technical setups which will get you in against the masses because the move is generally almost over.

What I get from this chart below is:
1. The trend is still up
2. We have not broken the previous pivot low from last week
3. The market is showing extreme panic selling and I anticipate some type of bounce or bottom shortly.

VIX – Volatility Index – Daily Chart
The volatility index measures fear in the market. So with the vix spiking up into a key resistance level, I would not be surprised to see it go a little higher then sharply reverse back down.

Trading off fear and greed can be very profitable but you must understand the two. Greed is a slow driving force in the financial market. As prices rise day after day the greedy continue to buy more and if they see any sharp dip they just look at it as an opportunity to buy even more (even though its a sign of smart money distribution selling) until eventually there is a huge collapse from the big money players unloading their positions and the greedy are left holding the back with a higher cost average price. This is the reason market tops tend to take 3-7 times longer to form than market bottoms.

Fear on the other hand is very quick. Think of it as if you were walking through your house at night down a dark hallway. When all of a sudden your friend jumps out and screams catching you completely off guard. What do you do? You jump, most likely yell and drop everything you were doing, then 30 seconds later you are back to normal. Well this is what happens in the stocks market also…...

Traders hold their positions until a piece of news hits the wires or there is a strong selling day and their investments start falling quickly. This sudden news or price movement which they were not anticipating causes traders to panic and sell everything before the investment collapses. Typically a couple days later the price rebounds and after a strong bounce these traders decide to buy back their position and ride the price to new highs. So what if you were to get in near the bottom then let all the traders bought back after you? It generally means big money for you. This is what I look for and what I consider panic selling to be.

Stocks Showing Signs of Being Oversold
This chart below shows the percentage of stocks trading above the 20 day moving average. Over time I have found that when 75% or more of stocks are trading above their 20MA then the market is getting overbought and one should be looking to tighten stops, take partial profits and or look for short setups.

On the flip side when only 25% stocks are trading above the 20 day moving average I find the market usually puts in a bounce or rally which lasts several weeks.

As you can see in this chart after Wednesday’s sharp move lower we are now entering into an oversold market condition. I expect volatile prices for a few days as the market stabilizes then a move to the upside.

Mid-Week Trend Conclusion:
In short, I feel we are in for some choppy price action over the next 2-10 sessions. With the current market trends I do feel that the odds are pointing to higher prices for both stocks and commodities.

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The SP 500 and Gold Play a Crazy Little Game of Poker

From our partner J.W. Jones at Options Trading Signals........

Recently I have had several members of my service requesting my thoughts on the macroeconomic backdrop which is shaping financial markets. I decided I would proffer an article about why I find such practice to be a total waste of time. Don’t get me wrong, acknowledging what is going on in the world around us as a trader is important because economic data and geopolitical events shape social mood. Social mood is just one catalyst that directly impacts financial markets and it is important for traders to monitor the world around them.

However, building trading plans based on events with outcomes that are unknown and unknowable is foolish. If an event’s outcome is unknown, one would surmise that the market’s reaction to the news is unknown as well. If a trading plan is built on multiple unknowns it can lead to a disastrous outcome for trades built around such premises. I pay attention to the headlines, but I don’t base trading decisions solely on the news cycle. Spending time building detailed thoughts about the future of events and then trading based on those events also cause traders to become biased with regard to price action.

Let me be clear, I do read analysis from experts on global events, but I don’t build trading plans around what I read. I try to look at the news and decipher what impact events will have on social mood. Once I have what I feel to be a grasp of social mood, then I look at fundamentals which could be earnings reports or economic data points searching for more clues about social mood and the strength of specific economies. From there, I use basic tape reading and technical analysis to help identify trades that have sound risk / reward. Trading is not a guessing game, nor is it gambling. The best traders take a variety of forms of data, interpret them, and then build trades that make sense based on probability.

Trading is very similar to playing poker. Everyone sits down with the same amount of money essentially and the money on the table does not really change. All that happens is money moves from one perception of the game to another. Those who understand and accept risk at appropriate times are rewarded more often than those who ignore risk. As time goes on, the players who understand the game and risk the most make the most money as their probability of success is higher than those who play every hand ignoring potential hazards. Trading is identical in thought and practice. Understanding risk and leveraging probability is what separates great traders from speculators.

As is customary, I will provide readers with a little bit of insight about what I believe could play out in the S&P 500 and gold. Before I get into the chart work, I would like to remind readers that this market is treacherous. Risk has not been this high for quite some time and ignoring it is foolhardy. I am trading smaller position sizes, taking profits quickly, and ultimately I’m sitting in cash waiting for price to breakout and offer solid setups where risk is defined. Currently the S&P 500 and gold are stuck between major overhead resistance and underlying support. Breakouts are going to transpire, but the question is which direction price will ultimately go. I’m going to let others do the heavy lifting and wait patiently for a solid setup to trade.

It seems to me that social mood is pretty poor at this point, economic data has not been great, earnings have been solid except for Caterpillar, and headline risks are plentiful. With that said, I am starting to lean slightly in the bullish camp. My reasoning is built around the fact that the majority of retail investors and novice traders are all setting up for a nasty selloff.

The only selloff I see possible is in the Treasury bond market and possibly the U.S. Dollar. In either case, equities could rally and it would be a surprise to most investors and traders. Mr. Market will punish as many traders and investors as possible and the majority are leaning bearish, so my contrarian instinct says to watch for bullish setups, but be patient enough to see them breakout before jumping aboard.

I intend to trade the S&P 500, but I am waiting on a confirmed breakout in either direction. I really don’t care which direction it is, I just want to be patient and let Mr. Market talk. Once I know the expected directional bias, I will have a solid risk / reward entry because I will be able to define risk at the breakout level regardless of which direction price ultimately arrives at. The key levels I’m watching on the S&P 500 Index are shown on the daily chart below:

If the S&P 500 extends to the upside above the S&P 1,350 price level a test of the 2011 highs will take place. I believe that if tested a second time we could see the 2011 highs taken out and a trip to the S&P 1,420 – 1,450 price levels before year end. Consequently, if price breaks down on the S&P 500 below the S&P 1,295 level I expect price to work down to the March pivot lows. If they breakdown, a trip to the S&P 1,150 – 1,180 area is likely.

Thus the conundrum described above is now in focus. The S&P 500 remains range bound and until a confirmed breakout takes place, I will likely remain neutral with a slight bias to the upside for good measure. However, I would point out I am simply going to be patient and let Mr. Market dictate the terms of price. I am just going to wait Mr. Market out instead of having some kind of trading plan built on assumptions about the outcome of multiple independent variables which at this point are unknown.

My most recent article discussed the likelihood for a small correction in gold and silver. We pulled back quite a bit, but news coming out of Europe and the flight to safety has bounced gold prices back near recent highs. I will likely establish new long positions in gold and silver on a breakout over recent highs that has strong momentum and volume. I continue to believe that in the longer term gold and silver will remain in a bull market due to the continuing devaluation of various currencies by deficit laden, overextended federal governments around the world. The daily chart of gold is shown below:

Gold similarly to the S&P 500 is trading in a range between the recent all-time highs and the breakout level which was offering resistance and now stands as support. If price breaks above the recent highs I will expect a move higher that could close in on $1,700 – $1,750/ounce by the end of the year. If price breaks below the recent breakout level (1,580) a thrust as low as $1,410 – $1,480/ounce could play out in a short period of time. I continue to believe higher prices are far more likely, but I will respect the price action. The weekly chart below of gold prices illustrates the key price levels:

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Crowd Behavior Moves Gold, Silver and SP 500…Not The News!

From our partner David Banister at Market Trend Forecast.....

How many times have you scratched your trading head wondering why gold or silver were either rallying hard or dropping hard on seemingly bearish or bullish news? How about the general stock market represented by the SP500 Index? Has it ever rallied when the headlines were horrible or tanked when the news seemed good? Well, welcome to crowd behavioral dynamics and investing!

At my TMTF service, I use Elliott Wave Theory combined with a few other indicators like sentiment gauges and Fibonacci relationships to forecast the coming bottom and top pivots in Gold, Silver, and the SP 500 indexes in advance. In doing so, I often ignore the day’s headlines completely and rarely if ever use them to forecast the next movements in the precious metals or broad stock markets.

Let me give some examples of why you should learn to ignore economic indicators, headlines, and talking heads on CNBC and elsewhere and focus on crowd behavioral patterns. Learning to scale in long when everyone is getting bearish and taking profits when everyone is universally bullish is much easier if you follow Elliott Wave Theory, and apply that theory correctly. If the matter between your ears is unabashedly biased, it will not work… 

One must be objective and open minded to change to survive these volatile markets.

Recently with Gold, we had a major drop from $1557 to $1482 over brief window of time. When I last wrote about Gold several weeks ago publicly, I presented a bullish and a bearish case. I had said Gold must close over $1551, otherwise it may have a truncated top and correct hard. Sure enough, a few days later Gold hit $1557 intra-day and could not get over $1551 on that close. Within days it collapsed and dropped below $1500. How did I know this in advance? Crowd Behavioral Patterns are repeated throughout the markets over and over again and again. Here is the original chart I sent out many weeks ago showing the possible drop:

Gold did end up dropping to the 20 week Exponential moving average at $1480 range, and as it did I noticed a clear “ABC” weekly pattern. Now this is an Elliott Wave pattern that can warn you of an imminent bottom in Gold in this case. In late June, after this major correction I wrote up another chart and showed a potential bottom coming in Gold around 1480, and then on July 5th I confirmed the Bull views on Gold were coming back into play, which you can see with the June 29th chart I did below for my TMTF subscribers:

We were able to adjust our views from short term bearish to moving back to bullish and still catch the big swing in Gold. The precious metal rallied from $1480 ranges to $1610 recently, and now is likely to go through a minor correction to $1568 or so. All of this is the crowd’s action together pushing positions into overbought stages of hysteria, and back to oversold stages of pessimism…I simply track those patterns and try to forecast the next move ahead of the crowd running in or out.

Another sample is Silver as it collapsed from $49 down to $32-$33 per ounce not long ago. After the dust settled I sent out a chart and told my TMTF subs we would likely seeSilver trade in the $34-$41 range for quite a while, before mounting another attack back towards $50. Right now I see Silver soon running to $45-$47 per ounce once it takes a breath. Below is the original early June silver chart I sent to my TMTF subscribers: We had an ABC strong rally which we forecast at TMTF in late August 2010 ahead of time, and once those rallies are over it takes quite a while to work off the sentiment.

Silver has indeed consolidated as forecast for about 7 weeks now between 34-41, having recently hit $40.80 and backed off. I expect Silver to break out over this range soon and attack $60 by year end as possible, but certainly $46-$50 by the fall. Last Wednesday I finally went bullish again based on crowd patterns and told my subs to go long at $37 as you can see below in the chart sent out then with a target of $46 likely coming. The herd of investors had formed yet another ABC weekly pattern, and it was time to go long.

Finally we look at the SP 500 which I forecast on a regular basis as well using Elliott Wave Theory and other indicators. This past week or so we saw a huge drop in the SP 500 and broader markets supposedly on Italy concerns and Eurozone issues. Although I am well aware of these issues, they are used to explain what just happened in the stock market, but not forecast it. Late last week I sent out the chart below to my subscribers and said as long as 1294/95 pivot holds, I remain very bullish on the markets. The SP 500 hit 1295 and has since rallied 31 points in a few days catching everyone off guard. That is Crowd Behavior 101 if I ever saw it!

The bottom line is understanding that the precious metals and broader markets tend to move based on major swings in sentiment from optimistic to pessimistic. The collective psyche of the herd is the most important because we can have periods of very bad news where the market will continue to rally, and also periods of seemingly great news when the market is dropping. The perception of the news of the day and how the crowd decides to react is more important than the news itself! If you’d like to try the TMTF service and take advantage of a coupon as well, go to Market Trend Forecast and check us out. You can also sign up for an occasional but somewhat infrequent free reports.

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Adam Hewison: I Was Thinking This Weekend….

From Gold ETF Trader contributor Adam Hewison.....

Well, Monday is here and we are no closer to solving the debt problem than we were last week. Europe is still a disaster and that’s been reflected in the bank stocks today.

I was thinking this weekend....If everybody moved out of Greece, what would happen to the debt and who would pay it? I know it sounds weird to say, but the reality is with the euro zone you do have the freedom to work in other countries.

The world has changed, yet the politicians still think it’s the same game. In the world of the Internet you can be based practically anywhere that’s advantageous to you. In an example like Greece, which is so far underwater it seems they are never going to be able to bail themselves out....Why not just walk away from the debt? One could stand to reason that most well educated Greeks have the mobility and the language power to move to other countries in the euro zone and work.

Today’s markets reflect what I was saying all last week in regards to the bank stocks which are under tremendous pressure today. BAC is down over 3% and other bank stocks don’t look much better.

Gold and silver moved dramatically high today with gold topping the $1,600 an ounce level before some profit taking came in to the market. Silver is up close to 3% as I write this, and is moving higher and faster than gold percentage wise. So let’s take a look at these markets in more detail and workout some target zones for gold and silver, as well as the banks.
Now, let’s go to the markets and see how we can protect and make your money grow.

S&P 500

Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = + 55

The 200 day moving average comes in at 1276 as does a long-term trend line from the lows set in March of 2009. That is the line in the sand for this market. We expect this level to be broken in the coming days and weeks.

SILVER

Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 100

Traders should be long this market as all of our Trade Triangles are in a positive mode indicating higher prices ahead. As we have been indicating, we are expecting this market to reach highs towards the latter part of Q3 and early Q4. Look for support for this market at 36.00. The upside target for silver based on the Fibonacci count of 61.8% is $42.98.

GOLD

Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 100

Traders who have been listening to my updates should be long gold. Short term traders should have taken the 52 week rule that we mentioned last Friday and have a trading unit on and have some nice profits in hand. We are looking for gold to move higher until the end of Q3 and possibly into Q4. Intermediate targets for gold are $1,642 and $1,650.

CRUDE OIL

Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = – 65
The -65 score indicates that this market remains in a trading range. At the present time, the crude oil market continues to have problems just over the $99 a barrel price point. Our Trade Triangle indicators both long and intermediate term remain negative for this market. Support comes in around $94 a barrel and resistance coming in just over $99. We are looking to buy this market later in the week, given the correct signals.

DOLLAR INDEX

Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 100

The Dollar Index has been trapped in a broad trading range for the past two months. The Dollar Index remains below its 200 day moving average. The longer term trend for the Dollar Index is positive based on our Trade Triangle technology. Resistance remains between 76.00 and 77.00. Support comes in today at 74.00.

REUTERS/JEFFERIES CRB COMMODITY INDEX

Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = – 55

The CRB index remains in a broad trading range. At the present time, our Trade Triangle technology is mixed for this index. Resistance is now at 350 and support looks to be at 340.

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