Market Timing Brief™: Mini-Rally in Slow Motion (with 4-25 Update – See Third Chart))

4-23-2012 Update of Mini-Rally in Slow Motion

The VIX has actually been falling over the past 8 market days and the market (SP500 Index) has been edging up during that time with hesitations and not by much so far.  What is forming is an ascending triangle, where the bottom of the range is rising and the top of the range forms a line across the top.  That is Bullish, but to resolve this positively, we need an upside breakout.  A break through the base of the triangle could lead to another significant correction leg.

Here is the SP500 Market Timing Chart at the close for 4-23-2012 at low and high magnification (stocks created via – note to those who receive an email copy of these posts that you won’t see the charts except on the blog page itself; follow the link in your email to see the post w/ charts):

Note that the SP500 Index has broken below the 2011 high breakout point.  A big negative unless it recovers promptly.

The SP500 Index must now hold above that bottom red line and bounce or there is more damage to come.  The breach of the white uptrend line (base of an ascending triangle) is also a negative market timing signal.

4-25-2012 Update:

sp500-index-chart-2012-04-25-10 32 am-high-mag

Testing resistance at the green line. Must hold above second red line below current price or another leg down will ensue.  The Fed has its announcement on monetary policy this afternoon.

Other markets such as GLD and SLV (see chart link below for gold and the bonus chart is guess what?) are forming support levels that could really go either way.  In the end, I believe gold and silver will go higher, because central bank policy is not going to change until we are out of the debt situation and that way out is the further devaluation of the dollar.  The problem with silver is that in a slowdown, it can crash, so you must use a stop if you are hoping for a silver rally here.  Go back and look at 2008 to get an idea of the possible plunge that could occur for silver.  Of course, the reason investors like silver is because of the adrenaline rush they get from the skyrocketing periods and then when it falls, they run to the medicine cabinet.  Trade silver, I do at times along with gold when I see an edge or solid trend, but otherwise hold gold.

If you have not seen them, have a look at the charts from this week as well.  They are listed on my “feed page” here:

Market Timing Chart Links Here

Enjoy your week!

Standard Disclaimer: Remember, it’s your money and your decision as to how to invest it.

The above is the text from the 4-22-2012  “Weekly Wall Street Sun and Storm Report™.  To see the current issue and this week’s ratings of all 35 markets I follow and receive the newsletter every weekend, subscribe here:

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This entry was posted in gold, gold etf, investment, Market timing, S&P 500 Index, silver, silver ETF, trading, volatility index and tagged , , , , , , , . Bookmark the permalink.

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