rally continues...

If you look at the charts that I posted in the past, you'll notice that the USD continues it's steady trip down, and the SPY continues it's steady trip up. If I have to gamble, I'd say today's pullback in the SPY and GLD is a good time to load up on long positions. If you notice the UUP chart, it hit up against the upper descending trend line. I'd place my bets that the UUP will continue to decline, especially what happened at 12noon to 1pm today, where the UUP rallied to the upper descending trend line only to pull back.

triple top SPY ?

Well I wonder if a triple top is developing on the SPY... 108 seems like a formidable resistance point, and a pullback from the 108 level would not be surprising at all. Furthermore today (Oct 12), trading on the SPY appears to be uninspiring producing a kind of spinning top. Given our run up recently, a small correction would appear to be reasonable (perhaps to 104 on the SPY). The market has already acted as if all is well, nothing bad is going to happen. Well when the banks report earnings, they really have better blow away people's expectations (eg. beat the whisper number) otherwise, we're going to tank. I have a feeling that at least a small decline would be reasonable because personally I think the market has gotten ahead of themselves, and the bulls appear to be getting a little tired. XLE also produced some kind of topping tail, so it favors the downside on the SPY at least on the short term.

As for GLD, I think it officially safe to say to buy on dips. GLD has clearly broken up to the upside, and with the money printing going on, that should bode well for gold. It looks like that any decline will be bought into starting with a support at 101.4 (where we gapped higher as GLD broke out). Failing that there should be support at 100.5 (the highs of 2008) and very massive support at 99.6 (gap fill).

The US dollar just tends trade erratically gapping up and down, but the long term and even the mid term trend is down. As for the short term, it likely favours the upside. It looks like we just completed a double bottom, and in the short term, there are higher highs and higher lows. A rallying US dollar likewise supports a small decline in stocks and GLD, (they both look kinda tired right now).

the week ahead... further downside or a bounce?

Well the SPY has finally had some downside move last week, culminating with an ugly jobs number on Friday, and with the market gapping down big time, only to recover to almost break even. For the next couple of days to weeks, it does look like we're entering a downtrend. Whether this is the crash which I think should happen, or just a normal correction in a bullish upmove (more likely scenario given all that printed money sloshing around), remains to be seen. But the downmove will not be smooth, and if you look at the SPY chart, it seems to be within a descending channel, (blue channel), and a bounce on Monday would not be surprising. Perhaps a bounce to the upper channel, and some resistance would present a quick shorting opportunity.

The US dollar (UUP) does appear to be in a rising wedge, (yellow wedge), so it looks like a rough, but ascending price action for the US dollar, thereby supporting lower stock prices, and frankly lower gold prices as well, as gold seems to be carving out lower highs and lower lows.

If gold does move to the 50 DMA (red line) that appears to be solid support (95-96), and with a stop at 94, long term ascending (red) trendline. That area may be a good area in which to go long in gold, as continued money printing should support gold.