Is The SPX In Consolidation Or Correction?

Monday, September 19, 2016

investing

The SPX continues to form a pattern that typically appears at major tops. The Fed is scheduled to meet this Tuesday, September 20th, 2016, and Wednesday, September 21st, 2016 to decide on its U.S. interest rate policy, AGAIN!  

This could be the event that finally triggers the next major wave down.  In my opinion, the next major move, in the market, will most likely depend upon what happens at 2 pm this Wednesday September 21st, 2016.

The short positions have not shown any great resiliency to the downside as of yet! The indicators for a massive crash are already in place. Investors are merely ignoring them.

In the chart below, I have outlined in blue a repeating pattern. This first pattern appeared in August of 2015.  Now, it is reappearing which leads me to believe that the next big move is to the downside.

I have marked the SPX target levels as well as displaying that it is sitting on the 100-day simple average! My expectation is that we will see a little more sideways motion and then break to the bear side!

My thoughts, as I have shared them with you on many occasions, are that the Fed will not likely raise the federal funds rate. They should stay unchanged. Gold, and most other commodities, should rally.  With no increase in interest rates, the dollar should fall as interest rates move the dollar. 

If rates remain unchanged, the dollar becomes less attractive to investors and typically falls.  Money moves from the dollar into commodities and U.S. Treasury Bonds.

The Fed days are usually bullish until about 11am.  Therefore, you might want to look at a bullish trade near the close on Tuesday, September 20th, 2016. Set appropriate stops and be sure to get out of the trade before the Fed announcement.

Looking at the U.S. dollar, its’ direction is still not clear.  It is now in a triangle heading to its apex:

Jacob Rothschild, Stanley Druckenmiller, George Soros, Crispin Odey, and their billionaire elitist colleagues, are moving massively into gold. Rothschild announced that his firm has been reducing their stock and currency exposure, and increasing their gold holdings. Rothschild is the best man to predict what is going to happen since he, and his elitist cronies, have created the timeline of catastrophes. This may be part of a scheme, similar to that of 1929, when Central Bankers created a huge bubble and then a massive crash so that they could buy up a ton of assets at pennies on the dollar!

We are currently in a “complex correction” that should end this week.  The Fed will most likely send gold prices soaring into new levels.

Conclusion:

Investor sentiment is what moves prices. Once negative interest rates were introduced, gold prices began to climb and they have been rising steadily, ever since. Most stocks are sky-high and market bubbles everywhere are awaiting their needle. One is left with preserving wealth via classical, real money -  gold and silver. When demand builds and the production declines, I expect precious metals prices to skyrocket in due time!

Follow me as I navigate the financial markets as both a swing trader and long-term investor using ETF trading strategies.

Chris Vermeulen – www.TheGoldAndOilGuy.com

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Chris Vermeulen has been involved in the markets since 1997 and is the founder of Technical Traders Ltd. He is an internationally recognized technical analyst, trader, and is the author of the book: 7 Steps to Win With Logic

Through years of research, trading and helping individual traders around the world. He learned that many traders have great trading ideas, but they lack one thing, they struggle to execute trades in a systematic way for consistent results. Chris helps educate traders with a three-hour video course that can change your trading results for the better.

His mission is to help his clients boost their trading performance while reducing market exposure and portfolio volatility.

He is a regular speaker on HoweStreet.com, and the FinancialSurvivorNetwork radio shows. Chris was also featured on the cover of AmalgaTrader Magazine, and contributes articles to several financial hubs like MoneyShow.com.