Fear Building

The chart below shows a serious breakdown, but the horizontal count target has already been met. The chart should pull back up before finally making up its mind

Unfortunately, this prognosis is not confirmed by the $SPX – which is less easy to “manage”

Horizontal downside count only partially met here. Could be one more feint.

Both of these charts are looking very unhappy.

The oil price is far from its moving average – which implies it should pull back sharply if the industrial markets keep heading south – or consolidate if the industrial markets consolidate. My “guess” is that the oil price will pull back, Given that diesel can be synthetically produced from coal at less that $50 a barrel, the current price is off the wall. Certainly not defensible on fundamental grounds.

Gold looking very strong

Based on the chart below, a 27% fall might be considered “normal” – given the 973 target shown on the Point and Figure chart above

Overall Conclusion

Fear building. If there’s a rush to the exits, this could turn ugly. Mitigating factor is the volume of shorts. History says most of these need to be taken out first. There may be a savage up-move first – which would serve to broaden the damage. One would have to be extraordinarily brave or extraordinarily foolish to try and “trade” this market. Cash and gold.