By John Galt
October 20, 2011 – 05:30 ET
All you need to know about what is coming can be found in the charts below. Things are breaking down in Asia and Europe thus it is a matter of days perhaps when we take the lead back and head south for the winter.
Gold, using the GLD ETF, is indicating a massive break about to happen below the $1550 mark, probably below $1500 (150 on the ETF approximately) in the days ahead:
(click on graphs to enlarge/reduce size)
The 50 day moving average has rolled over and is starting to head down as the sustained period of trading at the lower prices is indicating great weakness. This is correlated by the sharp high volume down moves as witnessed in the last 3 months of trading:
Lastly the correlation between Goldman Sachs (Symbol: GS) and the US Dollar is hard to miss as the USD appears now to have finished a short term consolidation and faith in whatever rumor of the day from Europe has faded. The short term bounce in GS back over $100 per share appears to have failed and it is now poised to retest recent intraday lows in the mid-80′s price range:
Today could be a day of violent trading as Greece might be a side show compared to the disputes between France and Germany and a very disappointing bond auction out of Spain this morning. S&P 500 cash levels of 1209 have to hold followed by 1194-1195, as any close below those levels should indicate the next downward thrust accelerating in the markets. This is not a bear move in a bull phase but in fact an intermediate term bear correction in a long term cyclical bear market. This is not for the weak of heart or inexperienced so watch out for the nonsense from the Bubblemedia to spout forth in volumes much greater than the daily NYSE figures.