Focus On Gold I expect a lot of action over the next three months and want to start off the period with one of our best performing trades, Gold. Gold has been in a bull market trend since 2016 and buying the first Trend Model Buy Signal coming out of dips has been a successful trading strategy. We usually wait for a momentum confirmation via channel breakouts to enter 2-3-month out-of-the-money calls. This is a simple technique when combined with 50% trailing stops, while generating the occasional blockbuster return: GLD 2024 Two Best Returns (So far) Gold Futures - Longer Term Perspective (2-Day) This is my longest term Gold Chart and yes, it is knocking on the door of $5K in the next two years. This is not a reflection of great optimism in terms Big Picture considerations as it is a hint of things to come across many different fronts. Gold Futures - Daily More practical for a trading chart as it is biding its time before the next leg higher, reaching toward $3K before year-end. GDX Gold Miners Index - 3rd Waves at multiple degrees of trend. GLD Daily Saving the best for last, this GLD Trend Model has been on a Buy Signal for about a year and has kept us on the right side of the trend. Active Gold Calls "Active" because they have neither had a 50% decline from entry, nor have they dropped 50% from their Best levels. The GLD Sep 20th $220C can be held so long as it doesn't violate the latter guideline, i.e., dropping below +108%. We will be rolling it over to GLD Dec or Jan calls before expiration. GLD 240 This 240 Minute GLD Trading Model may be the most useful trading chart of all of the above. GLD can dip into the Fib retracement zone - the shaded rectangle - next week before taking off in what should be a robust Wave 5 to 245-267. If it does, be ready for a new trading position going out to November-January. The Big Picture To describe the stock market as "having options" vis a vis directional trading over the next few weeks is tantamount to admitting, "I haven't a clue." On the one hand there is a plethora of bullishness, especially surrounding AI and related stocks, which is a warning of an impending top. On the other hand, that condition has existed the entire summer, has kept our trading leaning bearish and yet the market indices are closer now to new highs then to any meaningful breakdown. You can understand why I chose to lead off this weekend with Gold, a tradable in a clear bull trend that is offering buying opportunities with every dip, including next week if GLD dips into its Fib retracement zone. As the following charts indicate, what happens next in these indices will guide our trading stock options into the immediate future. As always, my "insights" are noted below each chart. What these three stock index charts have in common is that a hard down day next week turns them all extremely bearish, while virtually nothing stocks do turns any of them anything but neutral. That is the message going into the first week of September. SPY What is striking here is not the obvious double top, but the continued rally above the trend signal line (red trend line) without a fresh Buy Signal. Meaningful? Yes, but only if the next move is hard down. A move below the trend line (currently at 542) would have us loading up on SPY puts. IWM So long as the Fib retracement level at 78.6% is not taken out on a closing basis, this wave count is still alive, albeit not well. But as with the other two charts highlighted today, a hard down day puts this wave count front and center with much lower downside targets to come in the weeks ahead. QQQ As with IWM, so long as QQQ remains below its 78.6% Fib retracement level (currently about 485) this bearish wave count is viable. As with the SPY and IWM charts, it would take a hard down day next week to generate enough confidence in the count to trigger new put trades. In Summary There are times when a hard down day is just a dip in a mega-trend and there times when it screams, "get short now." Knowing in advance which time it is prepares a trader to act without accompanying stress, angst and/or analysis paralysis. We are at one of those junctures now and probably will be for a few weeks. That is not the same as predicting a hard down day is in the cards (although it probably is) and to buy every put you can at the next Open. First, the market must tip its hand, then we can [read:must] act. Remember, I am no more than a few hundred words of typing away from posting intraday Alerts up on the website and these days, am never more than an hour away from being able to type those words, create the charts, find the options and post that Alert, even from my iPhone. Here's my conclusion on this last day of August, 2024: Something isn't right with this market. I can't always put my finger on it, but I do know how it will manifest first, and the morning of August 5, 2024 is a perfect example (see link below). We were short from July 17th, giving us a three-week head start. Whether you garnered a portion of your best gains from that QQQ put trade or not, the fact is we saw it coming, we were ready and we acted three weeks ahead of when the brokerages shut down. No doubt in my mind: We haven't see anything, yet. Enjoy this last holiday weekend of summer and hope you don't hear from me on Monday, as no way it would be good news. Best, Allan August 5, 2024 Retail brokers hit by outages during US stock sell-off "Brokerages such as Charles Schwab, Vanguard and Fidelity experienced outages on their trading platforms on Monday, leaving some retail investors unable to trade during one of the sharpest market routs in years. "The S&P 500 and Nasdaq indices tumbled after the markets opened, led by sharp fall from big tech stocks such as Nvidia, which briefly dropped 15 per cent before clawing back some ground. "Brokerage customers began reporting outages around 9:30am ET, according to DownDetector.com, which collects third-party reports of online service disruptions. None of the brokerages immediately identified the cause of the technical difficulties or confirmed the duration of IT problems affecting customers, but the industry has historically experienced outages on days of market volatility when huge numbers of customers flock to online platforms to trade. "As late as 11:30am, Schwab had a red alert banner across its website that read: “Due to a technical issue, some clients may have difficulty logging in to Schwab platforms and may have difficulty reaching us by phone.”
