This week we saw the market start the week by moving up then on Thursday it reversed and moved down on stronger volume closing out the week a little lower. The market is now in a short term down trend and bounces should be used to enter short positions.

The overall market is trading in a wide range with the SPX trading between 1040 and 1130. Until we see a break out in either direction gains should be taken quickly.   Our selections for the week will continue to be on the short side however a bounce early in the week is not out of the question. 

Gold is at a critical point where it can go in either direction. It looks to us as it will move down one more time before making another attempt at the highs.

The U.S. Dollar continues to strengthen, however resistance is near and a move down can come early in the week before it continues higher.

We are on vacation this week so there is no weekly forecast. Our members have access to trades and stops updated nightly

This last week the markets moved up trading in very tight daily ranges and low volume until Friday when they broke down in morning trading then recovered during the final hour. However, the up trend remains though it is not acting like it wants to go higher.

The SPX tested the 1131 resistance area Monday through Thursday getting as high as 1128.75 on Wednesday but was not able to reach or penetrate the high made in June. At this point it has printed a double top so unless it can break up through it on strong volume early this coming week we should expect a move down to test 1060.

We  have a couple of open long positions going in to this week but our watch list for Monday will include a few inverted ETF's. If the market does break up through the resistance area posted above we will look at entering more long selections.

Gold bounced as expected and closed just under resistance. We expect it will move down this coming week to test the 115 area.

The U.S Dollar continued lower and is now very oversold. a continued move down to the 79.60 area is possible but we do not expect it will drop much more than that before bouncing. We do expect it will close higher by the end of the week.

This last week the market moved down testing the break out of the down trend on low volume. The current trend is still up but the volatility that we have had the past three weeks has continued.

We expect this coming week the indexes may continue slightly lower on low volume early in the week before turning back up. We do expect to close out the week at higher prices. 

As the indices move down to test the break out area there is a chance that the markets will break back below the previously broken down trend in which case the current up trend and break out will be void and the previous down trend will be back in force.

Gold broke below the 114 support area and is now poised to move up slightly before moving back down. It is currently over sold so a sideways to up move should be expected. Any moves up will be considered correction in an over sold down trend until resistance is taken out.

This last week the market was up, no it was down no it was up. We saw some big moves this week but at the end all three indexes gave us a weekly key reversal to the up side. They also gave us a higher low and higher high. As usual it does not matter how bad the news are or what we think the market should do based on the news we are bombarded with every day. All that matters is what the market is doing and at this point it is telling us it wants to go up. The U.S. Dollar continued lower and has more room to continue in that direction. Gold is trading in a range but is getting close to the up trend on both the daily and weekly charts - a break of that trend line would not be a good sign. At this point the trend is still up but we should be prepared to go short in case it breaks the trend. The more we look at the action this week the more convinced we are that a bottom has been put in and we are now at the beginning of another bull run. This does not mean we can't get another week like the past two and get another reversal this time to the down side, but there is no way anyone can know if it will so we have to go with what the charts are telling us at the moment.us at the moment.

This last week we started off Monday with battle that ended slightly positive following on from last weeks rally presumablty due to earning expectations for this week. One more push tuesday left the main indices for the market on Wednesday with small bodied candles with longer lower tails with the SPX closing just negative, and the COMPQX and DJ-30 closing just positve. Thursday saw progressivley longer lower tailed candles developing on the COMPQX and DJ-30 which closed slightly negative portending a bearish move down, whilst the SPX fought back with a last retest of resistance. This set the scene for fridays data and earnings to dissappoint and the market reaction was a quite clear selloff.

The Nasdaq Composite continues to trade in a downtrending channel making lower lows and lower highs and Fridays decline of 3.11% was on higher than average volume.

Both the Standard and Poors 500 and Dow Jones Indices broke down on Friday on stronger volume. The SPX made a lower high and we should now expect a lower low, lower than the 1011 July 1st low.  The Dow Jones Index breakdown had the highest volume of the month so far. We should see a test of the July 2nd lows and maybe a lot more than that. We should know by the end of the week if this is a more substantial breakdown or is just volatility bounces within a range.

This last week the markets bounced and although they have gone higher than we originally thought they would, they did it on very low volume.

It looks like they can continue higher but we believe they are very close to topping out. The charts have not given any signs that they are ready to roll over so we will be looking to the long side this week, but we will be booking gains early and will likely close out all long positions by Friday.

We are bearish and do not believe this move will get any legs but it is a short cover rally and we do not fight the tape. We will switch to the short side as soon as the charts tell us to do so. Conservative traders are best off staying in cash and sitting on their hands until this move plays out. If this is the beginning of a new bullish trend there will be plenty of time to get in on the trend once it is established.

Gold bounced but closed just under resistance and is more likely to go down than it is up at this point. We are still looking for a test of the 114 area before we look to the long side.

The U.S. Dollar came down all week but bounced right on the up trend support line on Friday. It is over sold now so a bounce this week is likely.

This last week we had anything but the normal quiet pre-holiday week that we expected and is the norm. The markets were flat and on very low volume on Monday but thats where the normal quiet week ended as on Tuesday the fireworks began. The SPX dropped 30 points on Tuesday and continued lower the rest of the week. On Thursday the markets reached new lows for this down trend and reversed closing the day almost back even. It looked like a bounce had begun but with the unemployment numbers coming out on Friday and a long weekend in the horizon buyers were hard to find and the market continued lower closing at new lows on Friday.

However, though the markets are now oversold this only really matters in sideways or slow trending markets and means absolutely nothing when the markets are in a bit of a panic. In that state they can continue to be oversold and can actually reach further oversold levels. On Tuesday or Wednesday at the latest the SPX will print a so called Death Cross pattern. The death cross will happen even if the markets bounce on Tuesday as the 50 day and 200 day sma's are slow moving averages.

1. It can continue lower to the 950 area on the SPX and then a bounce to test 1041
2. Or, it can start to bounce here and most likely move up and test the 1065 area (the intra-day low of the May 6).