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).
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