Turning points

07/11/2009 by Philinje.

There is a turning point next Tuesday for equities and gold, probably a high, according to one cycle theory. Delta says the next short-term turning point is Nov 15 or so, which is probably a low (the last one was Nov 4, apparently a high).

Next Tuesday is day 86 of the 86-day cycle, which is loosely based on Martin Armstrong’s work. If gold and equities stay at current levels or go higher, that could mean they form a top on day 86. But it’s also possible they could accelerate higher.

So far, equities have been correcting while the dollar has bounced from 75 up to 76.8 then settled at just below 76. If the dollar goes up from here, it will have formed a higher low. Then if it moves above 76.8, it will have formed a higher high. That would signal the beginning of a rally (though of course no signal is a guarantee, it’s just something technical analysts will observe).

Gold itself seems quite bullish and there is the potential to reach $1120 on this move. If that happens, there will be some correction and the severity of that will be telling. Gold seems to be acting alone and according to some, the relative weakness of mining stocks is a non-confirmation of gold. Silver, too, is not as strong as gold.

So caution is still warranted and really there are no firm indicators of what could happen. But $1120 seems to be an upper target and will likely be a top of some sort.

Let’s see what happens next Tuesday then later in the month.

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