In all the years I've been tracking the Fed and the previous chairmanships, Janet Yellen is coming across as being totally out of her league and just plain incompetent. Now before anyone says that's a sexist remark, I would say the same thing about her predecessor "Helicopter Ben." Whose big idea was to do everything the opposite way of what they did in the "Great Depression" and that is, to print money, print money and print even more money. The bottom line is the Fed has no idea how to get out of this quandary that they created themselves and for the country.
What's going to happen no one knows for sure, but one thing is certain, the markets will tell us where they want to go eventually. The other thing that's certain is that the Trade Triangles will get it right. I'm 100% confident in saying that.
Let's just take it and look at where the markets closed last Friday.
Dow (INDEX:DJI) - 16,384.58
S&P 500 (CME:SP500) - 1958.03
NASDAQ (NASDAQ:COMP) - 4823.92
Gold (FOREX:XAUUSDO) - $1139.08
Euro (FOREX:EURUSD) - 1.1308
Crude Oil (NYMEX:CL.X15.E) - $45.07 in the November contract.
As I write this before the market opens all the indices are still lower for the week, gold and crude oil are higher and the Euro is lower against the U.S. Dollar.
Here is how the Trade Triangles see the markets right now:
Dow - intermediate trading range - sidelines - longer-term negative
S&P 500 - intermediate trading range - sidelines - longer-term negative
NASDAQ - intermediate trading range - sidelines - longer-term negative
Gold - $1139.08 - intermediate bullish
Euro - 1.1308 - intermediate trading range - sidelines
Crude Oil - intermediate negative - longer-term negative
Here are the key levels I mentioned in yesterday's post for the major indices:
Dow - 15,979
S&P 500 - 1,903
NASDAQ - 4,614
Yesterday all the indices came very close to these areas before reversing, these levels now represent key support. If they are broken today or next week on the downside, it will turn the green weekly Trade Triangle to red accelerating the market's downward momentum.
We are now rapidly coming to the end of the third quarter and all the major indices are lower for the quarter. This is the first negative quarter we have seen for the NASDAQ index that previously had shown gains every quarter for the past ten quarters.
One last thing to remember, 2015 represents the sixth year of this bull market. Historically this market is getting very old and only once in history have we seen a seven-year run. I think the odds of it continuing in 2016 are slim.
Have a great weekend everyone, I'll be back on Monday.
Every success with MarketClub,