Update - 2/4/10

Stocks

The Dow today closed below the 10021-10075 support area. The test of last Friday's low was a failure as that low was broken. The large decline did technical damage that indicates the bullish wave three count from the July/2009 low may not be valid. The odds that we have completed a primary wave (B) or wave A of (B) retracement of the entire October/07 to March/2009 decline are now at least 50/50. That is the alternate count given in the very first post in March/2009.

The wave A of primary wave (B) count seems to be the better count at this time and would bring a higher high in 2010 or 2011. That count means wave B of (B) began at the January top. Initial price targets for this decline are Dow 9700, 9100-9300(strongest) and 8600-8800. That could happen by early/mid March when the next significant cycle confluence is due. A chart will be provided by this weekend that will show these new counts.

GLD

Gold also went below last weeks low and now appears to be heading for a mid-February low when the next gold cycle is due. Wave count is now not clear but I remain long term bullish. The next support is 102-103 given previously and stronger support at 99-101.

Update - 1/31/10

Stocks

The Dow made a slightly lower low on Friday at 10044 and closed at 10062, both within the price range for a low given last week. All major indexes closed at Fibonacci and/or trendline support and sentiment has gotten very bearish. Would not be surprised to see a strong rally early in the week followed by a possible retest of the low later in the week. If Dow 10021 does not hold next support is around 9800. If 9800 does not hold, may have to look at new wave count possibilities.

Gold

GLD went below the December low on Thursday which may negate the triangle formation. It may also indicate this is another wave two instead of wave four but it's to early to tell. There is a gold cycle turning up this weekend and price closed just above fib support that was touched on Thursday. The wave count also looks complete. The low should be in
but if not, the next support is 102-103.

GLD Wave Count - 1/24/10

Below is the GLD wave count showing wave (4) in progress. Gold stocks appear to be completing a large zigzag which helps to confirm this count.


Chart: Six month chart of GLD

New Dow Industrials Wave Count - 1/24/10

The last stock update called for the up move to continue to at least January 13th before a correction. The 14th ending up being the middle high of a triple top. The final top occurred on the 19th which was followed by a sharp selloff into Friday's close.

It appears the best count at this point will label this decline as wave C of a running flat from the October high as shown on the chart below. The most likely support area for this wave is Dow 10021 to 10075 sometime this week, before Friday. That flat would complete wave (2) from the October high. That means wave (1) of [3] from the July low ended at that high but the good news is that wave (3) of [3] is about to begin.

The alternate count would label this decline as wave a of Y of (2). If so, wave a of Y would be the first wave of either a flat or triangle and the correction has some time to go timewise but the price low could be this week.

Another alternate count would label the current correction a wave [4] from the March/2009 low. Wave [5] under this count would have to be shorter than the wave [3] length of 2000 Dow points since wave three can never be the shortest wave.

Chart: One year chart of DJIA

Update - 1/10/10

Stocks

Not much change since the last update with stocks continuing a steady move up. The S&P 500 and Dow still appear to be in wave (3) of [3] from the March/2009 low as detailed in the November 22nd post. The current up move should last at least until the middle or end of this week before any correction.

The previous short term price target of 10644 to 10683 on the Dow has been reached. The next target is 10940. The target for wave (3) of [3] remains 11720 to 16602 by mid July.

In the very first post last March, the March 6th low was labeled as an ending wave [C] of a very large flat correction from the 2000 high. That was the primary count and it still looks like the multi-year or multi-decade bull market that was forecast is correct.

GLD/Gold

GLD has continued to move up since the last post. It still looks like it is in wave B of (4) from the April/2009 low. As with stocks, the current up move should last at least until the middle or end of this week before any correction. The next price target is 114 to 115.

Gold Update - 12/27/09

Last Tuesday GLD made a final move down to 105.31 which is a .764 retracement of the last leg up into the December high. That low completed a zigzag formation which may be wave A of wave 4 from the December high. Since wave 2 that bottomed in July was a zigzag, the rule of alternation says wave 4 will be something other then a zigzag. The current upmove should continue at least until the end of this week. It needs to get above the 12/16 high to confirm that wave A of wave 4 is complete.