Stock Update - 2/28/10

The Dow has come down into Thursday to form what appears to be the right shoulder of a head and shoulders bottom. That is the outlook that was described in the last stock blog update on 2/19. Last weeks high needs to be taken out first to confirm the low is in.

The low on 2/25 was on the day a 3.75 month cycle was due and which will probably take the market to and beyond the January high as also indicated in the 2/19 post. There are some cycle issues that may bring some sideways price movement into mid-March after this initial advance off the low. The initial advance probably will not take out the January Dow high.

Gold Update 2/28/10

Gold looks to be completing the right shoulder of a head and shoulders bottom. That will be confirmed with a move above the February high. The February 5th low of 102.28 is within the range of the 102-103 target given February 4th. The 2/19 post called for an 1-3 week correction and while the price low may have been made on 2/25, the full correction may last longer timewise.

The initial price targets for this up move are 113 and 116 on GLD. These targets are shown as white horizontal lines on the chart below.

Nine month chart of GLD, click to enlarge