Following on from my comments last week - volatility – as I have mentioned a few times, you are going to hear that word a lot more before August is over. Initially I thought the signals were suggesting that SPX would have a downside bias but as mentioned in my last notes, the signals had switched and were suggesting that the SPX might have another go at the high which I thought would be exceeded.
At the same time, I felt that gold looked like it needed a correction with the chance of then going on to form an upslanting triangle. But that is going to take time. I did mention last week that sentiment had got very bullish on gold. Always worries me when too many people seem to be on the same side of the boat and I was questioning whether the gold price might pull back to the $1310/1300 support level. Just have to watch it here as with the volatility I am expecting, it may swing both ways.
So the markets look to be following the path I suggested but I repeat again – volatility into something important in late August/early September. It is just a time line – the charts don’t tell me whether it is a high or a low – just that it is damned important.
And just as a side note – of the nine sectors ETF’s that make up the US market, the biggest percentage rise on Friday was the Financials. They have lagged badly of late so it is very encouraging to see them finally top the list.
(20min delay)