Gold Update

In August 2018, gold carved out the bottom outlined via this projection published in the August 29 Profit Radar Radar Report.

Gold appears to have finished the first leg of this rally on February 20 at 1,350, which was followed by a 70-point drop.

The March 10 Profit Radar Report featured this gold chart, which projected a rally to about 1,320 followed by a drop back into the 1,250 range.

Gold made it as high as 1,325. As the updated chart shows, price dropped below the short-term black trend channel today (red arrow).

This is the first indication trade should work towards our buy target. The coming days will hopefully bring further confirmation.

Popular gold ETFs include:

SPDR Gold Trust (GLD)

iShares Gold Trust (IAU)

Continued updates are available via the Profit Radar Report.

Simon Maierhofer is the founder of iSPYETF and the publisher of the Profit Radar Report. Barron’s rated iSPYETF as a “trader with a good track record” (click here for Barron’s evaluation of the Profit Radar Report). The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013, 17.59% in 2014, 24.52% in 2015, 52.26% in 2016, and 23.39% in 2017.

Follow Simon on Twitter @ iSPYETF or sign up for the FREE iSPYETF e-Newsletter to get actionable ETF trade ideas delivered for free.

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S&P 500 Update – Let’s Call it What it Really Is?

Last week’s S&P 500 update highlighted a triangle and complete 5-wave pattern likely to be followed by a ‘pop and drop’ with a minimum down side target around 2,720.

Price popped to 2,817, and subsequent dropped to 2,722, confirming (and possibly completing) this pattern.

As mentioned in the March 10 Profit Radar Report, to see more down side, the S&P would have had to stay below 2,764, otherwise odds would favor a new high.

Barron’s rates iSPYETF as “trader with a good track record” and Investor’s Business Daily says: “When Simon says, the market listens.” Find out why Barron’s and IBD endorse Simon Maierhofer’s Profit Radar Report.

On Monday, the S&P moved above 2,764, and subsequently a new high.

How does that new high fit into the bigger picture?

Time to be honest

My analysis includes many different indicators, but the only one that’s really mattered is the December/January breadth thrust discussed here.

Elliott Wave Theory (EWT) on the other hand has been of little help. In fact, I have rarely seen more conflict among EWT analysts with many either adjusting their labels to match stubbornly held interpretations, or changing on a whim.

This can be (and usually is) costly for readers and investors. The honest approach is to just admit when the EWT structure is foggy.

The chart below shows the EWT conundrom: The wave structure going into, and coming out of, the December low is messy, and up to interpretation.

If you are not familiar with EWT, in order to pinpoint the main trend, it’s important to discern a clear 5-wave (or at least 3-wave) pattern. A 5-wave pattern usually marks the dominant trend, and is followed by a pullback, and trend continuation.

The blue stretch above labeled “5 waves” is the only clear pattern I’ve been able to discern (published real time in the March 3 Profit Radar Report, see chart below).

The completed pattern suggested a 100-point drop (or more). In reality it led to a 95-point drop. Since the drop reached my minimum target (2,720, green trend line, first chart) and stopped after only 3 waves (3 waves are counter trend), it may have completed the entire pullback.

The blue “a-b-c” labels show another valid path, which suggest the S&P 500 will soon relapse and re-visit the 2,700 range.

Technical Analysis

Basic chart analysis shows the S&P 500 bumping against a cluster of resistance (first chart). Risk is elevated while below resistance, but the more obvious a resistance level becomes (such as this one), the more likely it is for price to surpass or see-saw that level.

An immediate U-turn, or a quickly reversed spike above resistance, would be the first indication that the blue path illustrated above is playing out.

Continued updates are available via the Profit Radar Report.

Simon Maierhofer is the founder of iSPYETF and the publisher of the Profit Radar Report. Barron’s rated iSPYETF as a “trader with a good track record” (click here for Barron’s evaluation of the Profit Radar Report). The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013, 17.59% in 2014, 24.52% in 2015, 52.26% in 2016, and 23.39% in 2017.

Follow Simon on Twitter @ iSPYETF or sign up for the FREE iSPYETF e-Newsletter to get actionable ETF trade ideas delivered for free.

S&P 500 – Change of Trend?

This is a shorter-term Elliott Wave Theory-based forecast. A longer-term forecast based on a different set of reliable indicators is available here.

Most of February’s market action was outright boring!

Starting in late February, however, boring morphed into revealind. The range bound trading actually provided clarity.

Via the February 27 Profit Radar Report, I pointed out a possible S&P 500 triangle formation. The chart below (published in the March 3 Profit Radar Report) illustrated the triangle formation as it corresponds to Elliott Wave Theory.

Barron’s rates iSPYETF as “trader with a good track record” and Investor’s Business Daily says: “When Simon says, the market listens.” Find out why Barron’s and IBD endorse Simon Maierhofer’s Profit Radar Report.

Pop and Drop

In short, the triangle was to be followed by a pop and drop.

As the updated price chart shows, this is what happened.

The green line highlights important support provided by the February 21 low (2,664,55).

I don’t think it will, but as long as this support holds, a different kind of Elliott Wave Theory formation – a more complex ‘flat triangle’ – is possible (see blue lines in chart below).

Regardless, the post triangle pop should be wave 5, which marks the completion of this particular rally leg. The wave 5 high likely occurred already on Monday (2,816.88).

Regardless, a pullback is here or near. How much of a pullback?

How Big of a Drop?

It’s been difficult to count the rally from the December low in terms of Elliott Wave Theory, but the rally from the February 21 low has taken the shape of 5 waves (see above charts).

A completed 5-wave rally is always followed by a pullback. The question is this: Does the 5-wave rally complete only a small rally leg (going back to early February) or the entire rally from the December 24 low?

The blue box highlights the discussed 5-wave sequence (chart published in the March 3 Profit Radar Report). We know that this portion of the rally should be retraced for sure (solid blue arrow). However, it’s possible that the latest 5-wave sequence ends a larger A-B-C or 5-wave advance, which would suggest a much deeper drop (dashed blue line).

The S&P 500 futures chart, published in the March 3 Profit Radar Report, shows an ominous wedge formation with decreasing volume, which could translate into significant down side risk.

It looks like the minimum down side target is around 2,720, but a drop to 2,600 (and lower) seems quite likely.

We will asses down side risk as the decline progresses.

Continued updates are available via the Profit Radar Report.

Simon Maierhofer is the founder of iSPYETF and the publisher of the Profit Radar Report. Barron’s rated iSPYETF as a “trader with a good track record” (click here for Barron’s evaluation of the Profit Radar Report). The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013, 17.59% in 2014, 24.52% in 2015, 52.26% in 2016, and 23.39% in 2017.

Follow Simon on Twitter @ iSPYETF or sign up for the FREE iSPYETF e-Newsletter to get actionable ETF trade ideas delivered for free.