Market Update, Sunday, September 4, 2011

It's been a while since my last post and I wanted to share what I am seeing short term in the markets. IMHO, we are very close to reaching a short term bottom on most indices. Reading some posts on the web, I find mixed thoughts: Some say SPX could move lower, yet not below 1120. I actually feel either the bottom was made on Friday or SPX will find a strong support around 1138 or higher. The RUT seems to have found support at Friday's close; however, it will probably follow SPX if it moves lower.
Once the bottom is in place on all indices, I feel we will see a rally close to the 200 SMA since all indices are coming from oversold levels on the daily time frame and after we reach overbought, another leg down will occur that will take the indices to new lows.

As for Gold, lots of people view it as a safe heaven, climbing to "infinity and beyond". I am not comfortable with its technicals and I see many gaps below that make me believe we will see a strong correction in Gold some time in the future, the question is when. Short term, Gold is overbought, at the top or close to the top. We will see a correction in Gold soon, probably to 1740 or below, we will see.