Friday Weekly Charts

first it was the goldman Sachs news, then the disappointing (after you read between the lines) GDP numbers, and the realization that a Greece rescue is going to be a lot more complicated than everyone thought, and the market decided to puke. We are pretty clearly going through distribution, as any money manager with half a brain isn't taking any chances at squeezing out the last percentage points of this rally. I pointed out a head and shoulders pattern this morning on the intraday chart, and on the daily you can just make it out. 1080 is the critical support level, and until that either holds or breaks, there is no way of guessing which way we are going to go, but the momentum is down.

On the weekly chart, the most interesting thing has to be the volume for the last 3 weeks, combined with just about zero net gain, this also points out selling into strength. 1220'ish is the high so far, and seems to be putting up resistance, but  think we have a good chance to hit 1250 before this is done.

I targeted the 2008 high for the area the Nasdaq would hit resistance, and it does seem to be. Both indexes are still above the 10 week moving average, so don't expect a bear fest yet, and this could fall quite a ways and still be n an uptrend. A correction here is not out of the question. For the Elliot Wave folks, you can see a near perfect 5 wave pattern on the way up, which means we are in the final part of the move. I am no expert on Elliot Wave, but as I understand it, a 5 wave pattern is in the direction of the primary trend, which would mean the primary trend is up.

We woll do something a little different this week, as one of the week's big stories was the rush to safety in gold. We even had an anomaly a couple of time this weollar index up[ and gold up. As every central banker in the world tries to race to the bottom to save their ponzi finace systems, gold will break out here and head higher. And contrary to another commentator, who shall remain nameless to protect the guilty, rising gold is not a sign of economic recovery.

 

The other rush to safety in US Treasuries, which looked poise to break down (with yields breaking out). Instead, we appear to be driving yields down, just in time for new treasury issues next month. Break that 40 week average, and things will get very interesting here.

The market is clearly under distribution, the news is getting worse, and even Goldman sachs can't save the market now. If this isn't the top, we have to be awfully close.

I will have the new highs update shortly.