Exciting Gold Action

Our FibTime Cluster hints at some important cyclical point in time around Aug 22.

The real story yesterday was the renewed flight for safety trade out of Euros into Gold...

On a Dollar basis Gold defended some Ground which is impressive.

What does it all mean?

Answer: Stay on your toes... anything can happen here from a parabolic upswing to a breakdown and all this happens around an OPEX !!

(Base Case: Consolidation down/sideways into Aug 22 with a bullish resolution -THIS IS NOT YOUR 89% BaseCase, more like a 25%....)

The Wedge quiz resolved

Mr. Market has decided to break to the downside with a solid wide range candle. The Wedge should hold more bearish downside potential.

We've also talked for the last week or so that our VIX_OSC had reached the upside ceiling and to see it flip a week before the OPEX should promise some interesting trading the next week.

Quo Vavis SPX ?

Mr. Market has choosen to ignore the Aug 8 FibTime Cluster and leaves us with no clear clue for the now....

The Wedge Pattern is still in play with the lower boundary now moved up to approx 1115.

China (shanghai comp) is down 1.82 % as we speak with with Copper and the Euro showing weakness. All we know is that the Wedge is mature and will resolve btw. now and the next week.

We also know that the entire Market has frontrun some notion of a super stimulative FED 'surprise' for this week. Complacency is rampant !!

"A struggle against gravity is always a struggle against time"

MAY THE GAMES BEGIN.....

Remember the Gartleys

Revisiting earlier posts and checking on earlier messages is a staple here at "Reflections-of-Reality". Now that we are at a crossroads (RISING WEDGE in the S&P500) we wanted to check back with the technical picture of the US TREASURY (given the excessive steepness btw the 2yr & 10yr) and the EURO.

This is what we see through the lense of the Gartley pattern...

the TLT is still on track....

...and the EURO is reaching the Target Zone...

This could mean a Rally in the EXHAUSTED DOLLAR which usually means LIQUIDATION in orthodox ASSET CLASSES.

SUSI WEEKLY UPDATE

Susi has always worked well as a leading Signal Provider and now she turns negative. Pls bear in mind that the signals so far have NOT been confirmed by our CTI Indicator. Also don't forget that SUSI can be fickle....

Exhaustion Watch: Rising Wedge still needs to resolve

• The rising wedge still needs to resolve (S&P500) and this will determine the character for the next month
• August started very strong and flipped some of the bearish medium and long term gages at least at stage of the Month. We still have time left in August.
• Gold has flipped into a positively trending Asset which still needs a monthly bull pivot to confirm
• We experienced some technical deterioration on the short term side which could flip the trend if we see confrimation next week
• The bullish flows are very 'thin' meaning that this early August bull wonder was carried by low volume and not by serious institutional money (which all seem to wait for the correction....)

Golden 5: Sentiment looks fairly extended

Tops usually need time to develop and this one looks long in the tooth.....

In terms of our VIX_OSC that looks at the 'incremental' position the Option market is taking beyond the Cash market it tells us the PROs are getting ready for some corrective action.

Golden5: Breadth

1. Neg. Div with the 20d Highs: BEARISH
2. 20d Lows rise: Bearish
3. Buying Pressure still strong: Bullish

Still to early to argue for a change from a Breadth point of view.

Employment Friday: final move in a rising wedge

Potential Scenarios for today's nfp payroll day:

Target Dates for the move are around Sep 26

Where are the flows coming from that support the market....?

Employment Data on Friday = Kick off ?

Tonight I want to share with you a 6 week FibTime outlook. What we can see is that the 'Employment Day' (- (0-2) days) seems to be the event of the week not only from a fundamental but also from a technical analytical/ cyclical point of view.

These Energy-Zones can be bullish and/or bearish. As of now the evidence hints at a top that could fall all the way into the end of September....but I could also be the other way around, i.e. an acceleration that tops in September... (<=> think another stimulus program, Fed policy changes etc.)

Golden 5: Sentiment goes Extreme

Mr. Market is Overbought and Sentiment has reached Extremes and timing sets up for Aug 6....

Don't get pulled in....

Timing Idea for the Spyder

Mr. Market tried Jul. 26 but decided on Monday to go for the other alternative namely Aug 6. This means the BULL will stay some more days with us.

Also note that we are close to setting a monthly Pivot LOW if the Markets does continue up and does not take July's low out.....we are very early in the Month but certainly want to watch have an eye on this.

Golden 5: Sentiment: Put/Call ratio

The Bulls need to get the Call/Put Ratio (inverted Put/Call in the chart) up, because a turn from here could become devastating. Also note the little reverse Sell Signal where the Euphoria sets a higher Higher with a lower High in prices.

When you compare today with 2008 you notice that the 10d Call/Put ratio is about the same level from where things turned nasty, where they didn't even had this exceptional euphoria spike we had in April 2010.....THE BULLS NEED TO ACT FAST....

Golden5: Breadth

Breadth clearly hints at some corrective action. Pls also observe the weakening of the advance since mid last year shown in the 10d A/D lines.

(I'm not completely up and running after the summer break and aim to show you our Demand/Supply Pressure next week again, same for SUSI)

Golden 5: Sentiment

Nothing new here on the Sentiment Side. We look prone for a correction in line with our EXUBERANCE post earlier this week.

Exhaustion Watch

If our Timing Ideas got it correct and the intermediate Top was on Jul 26 then we should see the change of character soon in the Indicators. Our Exhaustion Watch (that looks only at 'exhausted' ETF's) seems to reflect the change in character where the medium & longterm (weekly & monthly Pivots) are still bearish against shortterm (still) bullish Trendindicators. The transition seems to gain hold with the first set of turning signals, Divergence Signals, FibTime clusters.

Gold acting very bullish!

If Gold can defend the Trendchannel, then expect some solid bullish action into next week or Aug 18-22.....

Sentiment: Historical exuberances

Our Vix_Osc is sporting some nice extreme which we had only 6x since 1998. 1998 & 2003 led only to shallow corrections whereby the remaining cases gave us more downside.

Timing Ideas

The Spyder Top will be early this week or mid next week.

Gold looks heading for a Pivot early this week...
....could be an interesting week.