Stocks Update - 10/28/09

The S&P 500 today closed below the 1050 support area. The price action today was bearish and the wave structure does not look complete. This move could continue down into early next week as the next swing cycle zone is 11/2 - 11/4. Next support is at 1039 and 1020. The wave count is still unclear. Best guess is this is the first leg down of a larger correction that may continue 2-3 more weeks. It's not clear at this point whether this is the first wave down of a sideways correction or a zigzag.

S&P 500 Price Targets for Low

Last Fridays post indicated that a short term stock market top was probably made the previous day on 10/15. On Monday 10/19, the S&P 500 made a slight closing high above the previous weeks high. That was the highest closing price of the week with the market now near the lows of the week as this is being written.

Stocks look highly probable to have a continued decline into the early or middle of next week as the C wave of a zigzag completes. The fib price targets for the low are 1062 and 1050.

Probable Short Term Top in Stocks - 10/16/09

It appears stocks made a short term top yesterday, with the s&p 500 topping one point above the 1091-1095 price range given in previous posts. That outlook may be negated with a close above yesterdays high. The move may go down to test the early October low in the next two weeks.

Gold/GLD Wave Count, Sugar/SGG - 10/11/09

Gold / GLD

See chart below for current GLD wave count. Wave 3 is currently in progress, to be followed by waves 4 and 5. Since wave 3 has already reached 104.15, the 105.5 target from the end of the triangle at the end of August should be easily surpassed before wave 5 completes, and possibly before wave 3 completes.
Chart: SPDR Gold Trust six month chart, click to enlarge


Sugar / SGG

Sugar appears to be at or near the completion of a zigzag from the late August high with an initial target near the late September high. This upmove can be played with the iPath sugar etf, symbol SGG.

Stocks at or Near Short Term Top? - 10/11/09

Last weeks post called for stocks to move up to test the trendline connecting the September 23rd and 29th highs, with a test of the 9/23 high on a close above the trendline. That test of the trendline occurred on Tuesday and Wednesday with a close above it on Thursday. The market is now testing the September highs.

It looks like the most likely outcome of this test is for an early week top between Fridays high and the September high price or maybe slightly higher as the current swing cycle time band of 10/7 - 10/12 ends Monday. The early week high might be tested toward the end of the week. A close above the 9/23 top would probably be followed by a move up to the 1091 to 1095 fib resistance zone on the s&p 500.

Stocks at or Near Short Term Low - 10/4/09

Stocks

Stocks appear to be at or near a short term low. The Dow has pulled back to the 50 day moving average and trendline support. Most likely, this will bring an upmove that will test the trendline connecting the September tops(shown on chart). That could happen by the end of the week. A close above that trendline should bring a test of the September 23rd top. A close below Friday's low would be bearish.
Chart: Dow Industrials three month chart, Click to enlarge.


Gold

Gold completed a zigzag at the 9/25 low(one trading day before the 9/27 - 9/28 swing cycle date) . It will probably move up along with stocks this week.