August... what will happen next?

What would August bring? I know in my opening post, I stated that I was bearish, and really I still believe that is the case. But as a trader it is important to trade what I see, and not what I feel. Based on the chart of the SPY, I do see a bearish ascending wedge, but what can happen? Certainly we are very extended to the upside, and at the very least a correction to 95 (yellow horizontal line) seems reasonable, especially since we've seen some hangman's the past two trading sessions. But can that correction turn into the crash I believe will happen one day or another, or will the market break above the ascending wedge, and make new highs? (A lot of magic can be done with $1T floating around, and the government has been known to print out more money on an as needed basis) Who knows? We'll just have to let price action tell us.

One thing that I do know is that the USD is on a long term trend downwards, and that does not appear that it will change. The gov't can print all the money they want, but they cannot dictate it's value, that is up to the market. Frankly I'm amazed at how the USD is holding up, considering that the USD is being printed like monopoly money. The the chart of the UUP does show that the USD is on a long term ( if slow) steady decline.

But sooner or later, I really do believe that there are ramifications to uncontrolled money printing that not even Uncle Sam can really do much about, and long term I think that bodes well for gold. Gold is traditionally money... it cannot be printed. So far the powers have managed to hold down the price of gold, but long term I don't think they can stop the eventual ascent of gold, as printing money is inflationary, and this long period of time where gold is consolidating only means that gold will shoot up to the moon if and when it does break out. For the time being let's just focus on the short term. If you look at the 30min chart of GLD, it does look like Friday's spike upwards, does make GLD overbought in the short term. You seen a spike up, a pullback, and then a lower high got created before pulling back again. I would imagine that a pullback to $92.75, gap fill and a support area would make it an attractive area to get in on gold. If you look on the daily chart of GLD, it does appear that an inverted Head and Shoulders pattern has formed, and a $100 price objective does not seem unreasonable. Long term, if GLD can manage to break the upper trend line at about $100, then that is probably when gold, and precious metals stocks will go to the moon.