Whatever it is it's ruining my morning…

We are witnessing a normal pullback in a bull market. One of many that we have & will continue to see fo quite some time. For example:

The S&P hit a high of 1012.6 on 08/14 & reversed for 2 days falling to 978.51 on 08/17, a drop of 3.7%.

The S&P then rallied to 1039.47 on 08/28, a rise of 6.2% from the 08/07 low.

The S&P immediately reversed that day after hitting 1039.47 an witnessed a 4 day drop of 4.6% to 991.97 on 09/02.

Then the S&P rallied to 1080.15 on 09/23. Up 9% from the 09/02 low.

This is now a 3 day drop ( intraday ) which fits the norm & the bull market remains intact. Lets see where the markets close.

The first sign of trouble woul be the S&P breaking its 20 day m.a. around 1035. If taht were to happen(and that's a big if) then 1012.55 the 50 day m.a. is the next support. Have a great weekend.

The "wave" on Gold. Look for pressure to the downside until approx. Oct. 7th. Gold can come down to roughly the 960-980 range. This should reverse in early Oct. and I anticipate a huge rally until approx. Dec. 25th. Time will tell.

Darrell:

A little more information is needed.  For "banks will lose $53 mil. due to poor large-loan deals." is nothing.  You must have misquoted.  $53 mil in losses is at a minimum for one of the larger banks.  And when you factor in the Alt-A resets in 2010, and the commercial real estate debacle to come in 2010 or 2011, it's just a drop in the bucket.  The market won't even blink, let alone hiccup.  You must be misquoting.  Even $53 billion is low, considering that most of the banks are actually insolvent.

If gold goes down to the 960-980 mark, where does that leave silver? Can I snatch some up at $13 or 14?

PLUS, the continuous silver commodity contract just went to a column of O's relative to the continuous commodity index; and the index itself is 1 box away from a relative strength sell signal; and on the primary chart it is 2 boxes away from an outright sell signal AND a change in trend (down). Commodities as an asset class are on the brink.

As a result, you may be able to get some bargains in silver before much longer…..if you still want it. 

Good point about the commodity related ETF's …

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perfectsim said:

Well, I think if and when I decide to buy some metal, it'll be through the kitco pool account. Unfortunately, I think that the IRS would treat this as an ordinary income gain (they don't look at precious metals as investments) and if I held it long enough I'd never be able to get a long term capital gain status with it.

However, I also don't want to touch SLV because I have serious concerns about the government taking over ETFs when the next wave down hits and the evil wall street execs are once again blamed for the Fed's actions.

All of this being said, I really want to buy silver at around $4 again when it gets down that far!

While waiting for silver to gain avour again, might be worth looking at ZSL, looks interesting on P& F for a short term trade …

It seems there are plenty of good reasons for the market to finally have that well predicted correction, but hold on, the market turns around, goes higher, and threatens to break out again. After yesterday’s rally, the markets are once again poised to hit new recovery highs & there could be a buying panic as more bears throw in the towel and come over to the bull side.

The reasons for the markets to pull back remain, but the sellers just aren’t in synch with the indicators, so the declines we get are shallow. There will be a bigger correction someday, but for now, the market appears to be heading higher.

The bull trend is intact with DJIA support at 9,600 and resistance at 10,000. If it breaks out to the upside from this already rising channel, the uptrend could accelerate.

I'm familiar with Fibonacci concepts but not the calculations. If Fibonaccis predict resistance of 1122, what do the predict as support after we hit it?

There are lots of subjective ways to use Fibonacci retracements. Here's one thing I try to do. After finding that 1122 is an important Fibonacci support/resistance area (in this case it represents about a 50% retracement over a two year period), I assume that price will find resistance there and at the very least will consolidate, but most likely (at least initially) pull back.

Where might the correction find support? If 1122 will be a major resistance or top area draw a Fibonacci grid from that point to the bottom of the chart (about 670 on March 6th). Once you do that you see some pretty remarkable things (possibly making it more likely that 1122 will in fact be a major resistance point).

The first thing you notice is that the .214 Fibonacci line (a minor Fibonacci ratio) is at roughly 1029; and you see chart activity clustered in that area during late August. Next, you observe that the 38% line on that grid is at about 950. This is indicative because you observe significant chart activity in that area during the first half of the month of June and for a few days in January. Where there are congestive support/resistance areas on a chart in the past, it makes it more probable that the price will find support/resistance at those areas in the future. Watch for it.

Finally, the 50% Fibonacci line on this grid is at about 895; and once again, this is confirmed by significant chart activity in December 2008, throughout May, late June and early July…….and for me, if the market bounces off a two year 50% Fibonacci retracement area, it is more likely to retrace 50% from that point. Thus, I'd be looking for the market to find support in the 950 – 895 range after bumping up against resistance at 1122. We don't predict, but we'd be dumb not to look for what's probable. If it doesn't materialize, we move on.

I'd like to correct a previous statement I made in this thread. I previously stated that precious metal ETFs aren't taxed at the higher rate that is for collectibles. I now believe this to be incorrect. I do believe that they are both taxed at the higher 28% rate.

Merry Christmas………good call.

So are you guys looking at miners or products like GLD ??