A Total Eclipse of The Cloud
On Monday, 8/21/17, there will be a total solar eclipse and I am here in Newport, Or which is in the path of totality and I’m looking forward to viewing this rare event.
So, of course I had to tie “eclipse” into the update somehow. And the title, “Total Eclipse of The Cloud” is appropriate as we are seeing something unusual on the S&P 500 chart. For the first time since the Presidential Election, price on the index is approaching the bottom of the Ichimoku Cloud. The cloud projects support and resistance zones and breaking through it often signals a change in trend.
We see some early signs, with a minor Low, Lower-High, New Low pattern, along with negative momentum building in the price oscillator. I am not calling the beginning of a correction yet, but some early signs are present that we need to watch very carefully. New lows below ~$2400 on the S&P 500 will be very significant and will signal the beginning of a correction with very high probability.
Gold is at a very key level and decision point. It has approached ~$1207 three times now this year and each time fails to break through. Historically Gold and the indexes are inversely correlated. If the S&P does start heading down, we are likely to see Gold start making highs above $1207 and begin a rally. Not there yet, but we will be watching.
Oil is still in a volatile downtrend that started at the beginning of this year. It rallied strongly last Friday and if it closes above $50 with some strength and momentum, we may see the end of the Bearish Trend. This is not proven yet either. If it reverses down again, then the downtrend is still ongoing.
What are your thoughts? Post your comments and questions! I read and respond to every one.
That’s it for this update. Trade Safe, keep you winners big and your losers small.