Gold up, Stocks correct

gold718.gifThe Gold market had been in a fairly well defined downtrend. Today it made a big move up. The market had made a classic three drives to a bottom with positive divergences in the momentum indicators. My previous comment was to wait for trend to confirm it has turned up and then buy pullbacks. I’ve been avoiding counter trend trades. It’s safer to wait for the trend to be confirmed and then buy pullbacks. The last three sessions had slight downward bias as the trend indicator was turning positive. Yesterday’s little doji candle stayed right on the now positive trend indicator. CCI momentum was turning down a bit but from over the bullish +100 area. Today it turned back up. There wasn’t a very clear entry point, however it looks like the market wants to make the next leg up. Pullbacks should be bought as long as trend remains positive. Also, some of the dormant mining issues have been doing better, such as Barrick (ABX).

qqq718.gifThe stock market tried to make a correction today. There was a late rally that cut the losses to minimal. The Nasdaq 100 chart shows an up candle with a long tail under the three day pivot (yellow dot). You can see how strong the trend is with the sharp upturn in the trend indicator (blue lines), and the CCI over the bullish +100 line. There was a slight downturn in momentum in the CCI with a slight divergence, but I expect as long as it stays over +100 the market will still be in a bullish mode. The Dow didn’t fare quite as well, but still trimmed more than half its loss. At least there is now a potential for a pivot on yesterday’s bar, which should give a reference point for the market to test, which I talked about in yesterday’s comment.

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