Next leg down forming now …

Good morning, this is Larry Edelson with my Uncommon Wisdom market video update for Monday, October 3.

Well this past week we saw pretty much what I expected, which was a lot of sideways, volatile trading action in the key markets — most of it dictated largely by ongoing conflicting news coming out of Europe on the sovereign debt crisis. One day we see progress toward some kind of deal to bailout Greece. The next day we see that the deal and the negotiating have broken down. And this kind of action in the fundamental short-term news is the backdrop to these markets and it is causing quite a bit of short-term buffeting up and down in virtually all markets.

That probably is not going to change over the next few days. I do expect that in the end, Greece has no other choice, as I have mentioned in the past, but to default on its debts and withdraw from the European Union and take back its drachma — its own currency — and basically devalue it in order to kick start its economy so that it can move forward. That’s likely to happen, in my opinion that is what is going to happen. It remains to be seen when it will happen. But it’s important to realize that the intermediate- and long-term trends are never affected by any day’s particular fundamental news or economic stats.

Having said that, let’s go right to the charts.

Gold: Gold did manage to rally off of its extreme low — down to $1,535 in Asian trading late Sunday night our time — this is a week ago Sunday. Gold continues, as I do this video on late Thursday night U.S. time, to buffet around between $1,650 and $1,535 with a bias towards the downside.

On Friday, we have several sell signals coming into place: A close below $1,646, which is what I expect, and $1,683 will give us basically a double weekly sell signal confirmation and also a monthly sell signal.

So assuming that’s elected on Friday, September 30, which I’m pretty sure it will be, then I can safely say to you that the gold market remains in a corrective phase and that we will see at least a retest of the $1,535 level, which was this low down here back in Asian trading late Sunday a week or so ago.

Continue reading:

via Next leg down forming now … | Uncommon Wisdom Daily.


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