The Indoos Stall Market's Advance

 The late day rally on Friday came to an abrupt halt when traders decided the Dow Jones was getting just a little too close to recapturing the 50 day moving average. The sell-off on the Dow Jones left the SPX and the Q's running for cover, also, even though the Q's are trading above their 50 DMA (lower half of the chart, below).

 Left click on chart(s) to expand.

 And this automated and sadly generic market (made up of HFT's and ETF's), strikes again. 

Always perform your own due diligence. These are only my opinions.

The US Dollar Looks Good (On Paper)

 A funny thing happened while gold was on its merry way to $2,000.

 It dumped.

 Which is a convenient way of saying the powers-that-be are still a force to be reckoned with.

 This latest setback in precious metals means that - believe it or not - the S&P 500 has actually out-performed physical gold since March, 2009.

  

 

SPY vs Gold

 Where gold stocks are concerned, it's close enough to equal to call the comparison between SPY and GDX, "on par."

SPY vs GDX

 GDX was rescued by a trend line on Friday, but the bearish wedge that's almost three years in the making is staring gold bulls straight in the face. When the assault started on gold stocks in 2008, never once did the GDX venture this far outside the Bollinger Bands.

GDX

 The comparisons between SPY and the GDX have to be given serious consideration here. When the markets initially topped in 2007, the GDX ignored the warning signs as precious metals bulls - convinced the world as we know it was doomed - continued to drive up the prices of gold stocks. Five months later, gold stocks topped, and when the dust settled, the GDX had lost more, on a percentage basis, than the S&P 500. A lot more.

 And here we are ........

 Not quite four years later, but the comparisons are ominous. The S&P 500 topped almost five months ago and gold bugs once again didn't heed the warning signs .... and we've just suffered through a similar drop in gold stocks vs what took place in 2008.

SPY vs GDX Five Year Weekly

 What's that mean, exactly?

 It means that since March of 2008, anyone invested in GDX has made no headway .... Friday's close was within pennies of the highs reached in 2008.

 Well, "no headway" isn't exactly correct .....

 You see, if you had bought GDX at the top in 2008 (and many a fool did), you'd have done so when the US dollar was at historical lows. So, if you've hung on through all of this, you can actually thank the US currency because your GDX would have made absolutely no gain except for the recent rise in the dollar.

 Go figure.

GDX and the US Dollar

Always perform your own due diligence. These are only my opinions.

Markets Recover

Always perform your own due diligence. These are only my opinions.

Week Begins with Huge Gap Down

 We would likely have to go back quite a while to find the last time the Futures gapped down 16.50 points to start the day's proceedings. It looks as though the dollar, precious metals and the markets are going to combine to create a whirlwind of reckless directional movement over the next while.

Always perform your own due diligence. These are only my opinions.

The US Dollar Extends its Middle Finger

 As strange as it may seem to gold bulls and the anti-dollar brigade, there is the possibility we just got one big, "SCREW YOU!" from the US Dollar.

 It's too early to tell, really, as this isn't the first time the dollar has confronted us with an ostentatious display of force over the past thirty months. Still, it may be a good time for bulls to fall back, regroup, and dig some trenches.

 Volatility bombs will surely fly in the coming months.

 Those fortunate enough to have sat out during the "trading wars" from three years ago are going to get a lesson in patience and perseverance.  

Always perform your own due diligence. These are only my opinions.

GDX

 The pattern posted for the GDX on September 6th remains valid, though anyone continuing to hold should be cognizant of what's been happening with the US dollar and the adverse effects this could have not only on the overall strength of the stock market, but also gold stocks. The GDX has risen substantially from the lows it printed in early August and it may not be a bad idea to lock in some profits.

 The GDX continues to out-perform the markets-at-large; nevertheless, the GDX can still look great against the S&P 500 even if both fall further from here. All that's required is that the GDX falls less. That may be a moral victory, but it won't be a financially profitable decision if such an event takes place.

Always perform your own due diligence. These are only my opinions.

The S&P 500

 The S&P Futures managed to rebound slightly after spending the majority of the day on a steep downward trajectory. The reversal did manage to set up a bullish impulse leg on the five minute chart, but with the way the markets are trading (volatility courtesy of your friendly neighbourhood HFT programmers) anything is possible. 

 Aside from a reversal at the pattern's midpoint on the five minute chart, a trend line from the August 9th lows on both the SPY and SPX also provided some timely support.

 The Spiders will need more than a bullish impulse leg on the five minute chart to regain positive momentum. The daily chart is threatening the midpoint on the daily pattern ... still well above the $111.25 outlined as "P," but coupled with a bearish flag, the bulls have a lot of work ahead of them to get the S&P 500 back on track. Any serious breach of the midpoint will likely be followed by another wave of selling.

Always perform your own due diligence. These are only my opinions.