FREDAlert!
Volume 3, Issue 4
August 19, 2011
Given yesterday’s trading, we have had a number of questions that we want to address.
First:
Barring extraordinary market action (which lately has been the norm!), this week should be the lowest weekly close of this down-move. While it is possible that this is the lower closing low we have been discussing to create a divergence bottom, it is MUCH more likely that this will be the weekly closing low that must be retested, and exceeded, within 4 – 6 weeks as we have discussed. Should this be the case, next week should be up, and the following week as well. Trade carefully and defensively – as we saw again this week the market is in a pattern of hitting minimum upside projections, and then reacting violently down – until this changes we remain vulnerable.
Second:
We have been consistently wrong on TLT. However, models continue to suggest it should be lower than it is now, and yesterday was the sort of technical formation that can indicate a short-term top. If subscribers are looking to take profits now is a good time (and this may be consistent with a stock market rally next week).
Third: Gold has come quite near my 12-month objective of 1890/oz or 189 on GLD, again sooner than anticipated. We continue to like gold and it remains one of our favorite areas – but we advise selling a bit more should it hit one of those targets.
Fourth:
Some of today’s trading will be Expiration related – we will be out in the field visiting clients rather than watching the machine. For investors – we would add stocks here, but leave money back to add to these positions again in 4 – 6 weeks should the markets, and the stocks, retest recent lows, which we would expect.