Markets topped today right at 2pm EST when the Fed minutes were released. Our shorting target of SPY $339/$340 or SPX 3400 was not hit to safely trigger the trade. Tomorrow is the moment of truth as many analysts claim we carved out a major low last week. If correct, the RSI shown above should remain in overbought territory and embed there as price climbs higher into next week. However, we believe price and the RSI should get rejected and head lower into early next week for a sharp, multi-day pullback.
The Russell will have the least support on a multi-day plunge and nice profits can come from being short the index. We are hopeful for the right setup and one more attempt by the Fed to prop price up tomorrow AM. Between now and the election, there is going to be massive manipulation and gyrations in the markets. Keep tight stops and trade small until the right setup occurs. Whipsaw will be the norm.
The dollar should resume its uptrend over the next 48 hours, pressuring metals.
$1810-$1820 futures is possible by next week in gold. These moves down occur in 1-2 days which makes shorting very tedious. When gold turns down into its final ICL, the blood bath phase, we will have a sustained 4-7 day move down, easier to short if one chooses. Miners and silver follow gold down, but gold is capable of rallying on safe-haven buying.
SPCE should hold support above $18.50. It jumped 25% so a small pullback leads to a healthy chart which can support a sustained upward move into October.
We got a solid doji today in UNG. Late-month rolling of futures contracts occurred yesterday, putting heavy pressure on natural gas. It is very difficult to determine when large players will roll or take delivery. Institutions and commercial hedgers will wait until to early the following month, October 1-2, to reestablish positions. A large gap up day, $1-$2, is possible the next few trading days.
DENN will lag until the broad market finishes its consolidation, most likely into next week.
Possible trades that will trigger the next 3-5 trading days are listed below:
TZA - Small caps next 48 hours if we get strength into tomorrow AM.
BIB - Biotech long mid next week on stock market low.
GLD/SLV/NUGT - Metals long if $1810 is hit next week.
TQQQ - long next week if our targets are hit: $110-$115
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