It’s been a relatively slow day in the market as Fridays usually are. I am most likely sounding like a broken record about gold and the indexes but I will show you again just to make sure that everyone’s on the same page for the upcoming correction.
In short, major indexes and metals are way overbought and ready for a pullback which will most likely be sharp. I feel a 3-5% correction is just around the corner. Both the broad market and precious metals are about to have their cycles turn align and top out. Meaning a wave of selling is likely to hit the market.
Adding more fuel to the selling is the fact that earning season is about to start and I do not think it matters what the news for the market will sell into it. Everyone thinks stocks are doing well which is why we have seen the strong rally the past 2 months. This is the typical buy on rumor sell on news which we saw last January on the good earning numbers. But if the news is bad, then I figure people will sell that news also.
Daily Gold Cycles Trading Chart
Here is a short video showing members of my new service FuturesTradingSignals.com what I feel the market will be doing for the day and over the next few days as I show live ES Mini Futures Charts.
Click to View Video: http://www.thegoldandoilguy.com/articles/day-trading-es-mini-futures-video/
Unfortunately we did not catch the recent rally. The market was giving off a very mixed signal at the time of the reversal and I wanted to wait for a pullback after the breakout which has yet to happen. I do think its just around the corner though.
It is important to realize that trading is not about catching every move the market flashing in front of us which will make us consistently profitable in the long term. Instead it’s the trader who knows what they are looking for (trade setups & risk levels) and have the discipline to follow a technically proven strategy and system which will build wealth over time. There will always be another opportunity just around the corner.
Disclosure: I do not have a position in Gold or SP500