Sept 14th- SP 500 To Take Breather?
The SP 500 index has run up as forecasted to our subscribers a few weeks ago to a high of 1123 from the 1040 fibonacci pivot. Here at TMTF, we immediately took notice of the clear 3 wave pattern during the drop from 1130 to 1040 and cautioned our subscribers that a rally was likely. We also advised that if the SP 500 could clear the 1094 area that the bulls would take charge and we would turn our intermediate views bullish for the markets.
The SP 500 did in fact surge past 1094 and is now running into potential wave pattern resistance as it tries to attack the 1130 highs of June and August. Traditional technical indicators are overbought, but could allow for a final surge this week and into early next week before we would expect a pretty good sized correction from September 21st through roughly October 8th to work off the overbought conditions and form a likely "wave 2″ A B C pattern to the downside.
With that said, we can see on our chart at the bottom of this update a clear "triple top" pattern, which causes selling resistance. This time though, I believe this 1130 area will be taken out after October 8th with a surge into year end towards 1220. Loosely speaking, we look for upside pivots at 1130, 1145, 1160, and then 1220. Downside is likely limited to roughly 1080-1085 ranges over the next three weeks or so. We should see a possible bounce to 1130 here near term, maybe stretching to 1145, and then a pullback into October 8th.
I have also commented with bullish forecasts recently on Silver and Gold. With silver at $18.73 an ounce a few weeks ago we turned super bullish with our pattern analysis and forecasted an intermediate multi month move to $26 to $29 per ounce. I believe Silver now takes the baton and out-performs gold going forward, and I remain bullish on both metals. Gold today is hitting new highs as the 1238 pivot I outlined looks like it served as a shallow pullback. Ultimately I mentioned we look for $1300-$1325 on this swing. Subscribers to TMTF were alerted to go long some silver stocks a few weeks ago and that is working out extremely well.
Below is the chart of the SP 500 showing Triple resistance zones, so this would be a natural place soon to cause a pullback as outlined above. Concerns over worldwide debt problems and banking issues may still crop their heads for a few more weeks before we begin a likely run from October 8th into the Elections in the U.S. in early November.
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Dave Banister- www.MarketTrendForecast.com