Market Comments
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UPDATED FORECAST—Trouble waters ahead. You may want to brace for impact.
Same advice as last week: “brace for impact.”
Let’s take a look at the last few newsletters, and see how things have turned out.
For a few week’s I had been calling for a move up in the Indexes from the middle of July to beginning of August. By the last week in July it was becoming clear that the cycles were experiencing an inversion (moving in the opposite direction). That is when it was clear an inversion was taking place, and led to the “brace for impact” warning.
Even when a rally from July to August still looked promising, I was warning that as soon as an agreement concerning the debt was signed, there would be problems “before the ink had dried.”
TLT -- We started predicting a 10% move a few weeks ago when the TLT was in the 95.5 range. Last week we though it might hit resistance at the top Gann Fan line, the move up continued hitting a high this week of 105.55. That is 10% in my book. :-)
VIX -- The Doji last Friday was not followed by a down candle; therefore, we don't put much faith in the single Doji being a key to things to come. The Vix moved from a low of 22.46 on Monday to a high of 39.25 on Friday. In May of 2010, it hit 48.20, and during the financial melt-down of it hit 89.53.
Wall Street Forecaster Blog
OIL – Back on 7/22, we took a short position at $25.66. Subscribers where told to buy Puts with the expectation of a 10% decline. OIL continued to ride the bottom Gann Fan line for a couple of days, but finally drop from 25.87 to 21.56 last week. That is a -17% move. Our Puts hit their 100% profit target on 8/4.
GLD – Have to admit, we really missed out on this one. Should have entered around the beginning of last month, but with the Indexes showing a possible move high, I was reluctant to pull the trigger. On the 25th, still thing that the conclusion of the debt talks in Washington would cause Gold to drop, we took a short position, and got stopped out the next day. By the time the end of the month rolled around, it was clear inversions where taking place, and the picture for the financial markets was looking bad, we took a long position with some GLD 163 Calls for $1.00. The next day they were at $2.00 (our target), and at $300 on 8/4.
Start your day with George Ure's view of things and things to come.
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So what’s next?
Well, the OSS Indicators show no change for the next few weeks. Of course, things can change week to week, but of special note is the Astro Trend Graph which goes even lower this week. I expect this week will be a repeat of last week. The S&P downgrade from AAA to AA+ for the U.S. is already having an effect. DOW futures are off 200+ points as of this writing.
A quick look at some stock recommendation services shows a 10-to-1 sell ratio.
Tel Aviv Stock Exchange plunged 7% Sunday.
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The OEX daily chart sums things up in one nice picture. Support has been broken!
At this point it looks like the hens are coming home to roost.
Astrological Outlook
Uranus is the planet of surprise. Pluto is the planet of debt. A square aspect is bad, and an Opposition between Mars and Pluto is also bad.
Want more bad news? The Moon will be in Sagittarius on Monday and Tuesday (knows as the "Sagittarius Factor" upon financial astrologers), a time of big price moves. Yup, we could see a move this week big than last week's moves.
When Uranus is involved in a bad aspect, you can also expect violent acts of nature or catastrophes.
It will be an interesting week.
Looking for some ETF to short the market with? Try these:
Short S&P 500 ProShares (Symbol: SH)
Short Dow30 ProShares (Symbol: DOG)
