Tonight I am writing a short article with my forecast, Swing Trading the Russell 2000 and the HUI Index “Gold Bugs Index”. I don’t have much to say other than I am waiting. The wedge you see in the chart below will break down sooner or later, probably sooner than later. One thing I say to myself when looking at the charts is “anything can happen in the markets”. I have a fairly good system for timing the markets, it’s not 100% but when used with pattern recognition it helps out a lot.The pattern in the chart will break down to the down side, there is as good a chance of that happening as the sun coming up in the east tomorrow morning. It the financial markets break out to the upside and if the Russell 2000 breaks to the upside, then… I don’t know what to say. It takes lots of fuel to make a market break to the upside on a pattern like this.
I don’t usually use indicators but I thought it would be useful to add one on the daily chart of the Russell 2000. I like the Russell 2000 only because it has the bulk of the american companies, the meat and potatoes of the american economy. The Dow consists of only 30 stocks ( I might add that the Dow has the bulk of the capitalization). I don’t think that only 30 companies give you good enough representation of the economy even though they are worth more than the other index’s in capitalization. The S&P 500 and the Wiltshire 5000 are great to monitor too, but I like the Russell 2000, maybe because it’s volatile.
In my previous post I mentioned the that perhaps the gold stocks might be something to look at but the HUI and the GDX are made up of gold stocks and if stocks decide to come down in price, then that includes gold stocks. There is one nice thing about the chart below and that is the hammer, the candlestick for the today’s market. The hammers are all over the place today, some aren’t very good though and don’t fit the definition of a hammer.
The pattern for the HUI index looked to be a wedge, but the more I look at it, the more it looks like an descending triangle, which is not good if your on the long side. If the triangle is a true wedge then look for the gold stocks to fly.
I want to buy something tomorrow, I might be looking at TZA again. I hate jumping in and out of the market, I like to buy at depressed levels and ride but that’s the way the market is today and a person has to like it or get out.
The Pivot Point Calculator Forecast— March 30, April 9, April 17, April 25, May 3, June 13
Remember, the pivot points can be the time the market price break support or resistance too.
So, Everybody… The HUI index, GDX, and all the other markets look good to buy for the next week or so, I don’t know how that pivot point is going to go on or around April 9th, up or down. The pivot point for tomorrow could fool everyone too.