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Friday, September 6, 2013

Friday Weekly Charts

This morning we tested the P pivot point and the 50dma, but that did not last long as we has a very big, and very rapid, drop right after the open. We may have found our resistance point for at least the early part of this month, and may be headed down from here, although the volume pattern still favors the bulls.  A very shallow pullback here should give the market the ammunition needed for another try at the 50dma, but anything deeper will put us in trouble again. We do have support right at the mid point between pivot points, and if that holds, we should be in bullish mode for the rest of the month. A failureill probably mean no support until the S1 pivot. For now, I think that is where our range is going to be for the next week or so.

The weekly chart shows support at the annual R2 pivot point, and possible resistance midway between that and the July high. It is possible this correction is over, but it is also possible we are in for a weak bounce followed by another drop. It is nearly impossible to figure out which it is right now.

Crude oil is right at an annual pivot point, which means it is at a critical resistance point. We can probably anticipate a pullback here, but a breakout past 110 is going to be very bullish, and a rapid rise in oil may actually help the stock market, at least in the short term. Long term, oil will find a point where the market says "too much" and backs off. We never know exactly where that point is, but you can usually see it coming, and I don't think we are there yet.

Gold is also up against a pivot point and looks like it needs a pullback, but the overall bullish tone here is really picking up some steam. I am anticipating a relatively minor drop here, but after that I think we may be in for one heck of a rally.

The first week of September has not quite shaped up the way the bears ha been waiting for, but this month still has a lot of bearish potential. I don;t anticipate a 2008 style collapse, but I do see the signs of a long term top forming, and it may be that 2014 is going to be a big disappointment for the bulls, but I am way ahead of myself here. For now, the bull marke is still intact until proven otherwise.

I will have the new highs update shortly.


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