Market Timing Brief™: Pivot Point

From this week’s market timing report on 5-28-2012 with updates in blue:  For more, please see the free subscription link below.

Update 5-30-12:  The gold and silver ETFs (GLD and SLV) are both back testing support and must hold around here.  The pullback in the SP500 Index is retesting the earlier progress.  I’d like to see a close above 1318.10 or so to ensure the rally continues.  Housing is weak today (ITB), so use a stop on any recent purchase.  Existing home pending sales were significantly lower than expected despite stronger recent Case-Shilling index numbers on housing.  Europe (VGK) is a mess without a sufficient political mechanism to get things done quickly, which is the overhang on the stock markets around the world.

Pivot Point

The Treasury market is still strong suggesting that all is not quite well with the world.  Europe is being saved one day and in danger of blowing up again the next.  We have returned to a taste of the volatility seen last summer, but we are only half way there as far as the volatility index chart is concerned (VIX).  The VIX is sitting on the support of the March, April and May highs.

Commodities are still very weak and could head to the 2010 low if a reversal does not occur very soon.  Oil briefly penetrated $90 to the downside this past week, but bounced to just above $90 to close the week.  OPEC wants $88 oil or better, but there is a lot of supply supposedly.

Gold has taken as much damage as it can without giving up even more in another leg down.  It is bouncing from critical support.  So far, the bounce looks good and should hold as long as the world continues printing money.  Then gold will likely suffer that new low.  Remember that gold has also been falling because the markets have been falling just as occurred in 2008.  Remember that gold and the US dollar can move up together as they did several times before during the Euro panics.  Unfortunately for gold, the correlation started a bit late this time.  We had to wait for gold to slink back to major support.  Until the past 3 days, gold has been moving WITH the Euro.  As I said this past week, this may be due to central bank selling out of necessity to handle the Euromess.  Silver is in the same technical position as gold.  See the silver chart, as it is the “Bonus Chart of the Week.”  The gold chart link is below as well.

Take a look at the SP500 Chart this week (link below).  The index has been “sliding up” slowly while jerking down to test support.  Overall this is positive as the markets had reason to sell off much harder.  Any new low would be taken badly and result in the next step down to about 1230 for the SPX.  This also holds true for NUMEROUS other indices.  So make sure you have stop loss points in mind for your positions.  The Bull side of this is to make sure you BUY moves up out of the consolidations and have a stop below.

If you have not seen them yet, have a look at the charts from this week.

Links to This Week’s Market Timing Charts

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

The above is the text from the 5-28-2012  “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, housing, investment, Market timing, oil prices, S&P 500 Index, silver, trading, US Dollar Index and tagged , , , , , , , , , . Bookmark the permalink.

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