So whether you share my views that we are going to have the great depression 2 or not within this decade, you got to believe that in the mid term the bull is going to continue with all that printed money sloshing around. But will happen on Monday, and what will dictate market action in the short term?
Well look at the chart in the SPY, and look at the commentary in the picture. The SPY opened at the high of the day, and closed significantly lower than the opening high. In the past when that happened, what did the market do? It happened in early January and we got a correction that lasted a month. It happened in mid February, and the market pulled back a bit before making the most recent highs. So what will happen next? Well certainly the chances are good that Monday will mark a pullback, and where will the pullback lead, if this pullback does transpire?
Well lets look at the chart of gold. GLD has recently broken below a descending turquoise trendline. What is the US dollar doing? Well the chart of UUP either shows a topping pattern, or bullish consolidation. Since the market is really overdue for a correction, I would say that there's a good chance that the dollar will rally just a bit more to cause a much needed correction in the market, and continued declines in commodities, before the mother of all rallies happens in the markets and commodities like gold.
Again, stops are required to play this game.
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