The Oil and Energy Stocks were leading the way with their recent bullish activity. As pointed out yesterday, the XLE broke out from a downtrend and was probably signaling that OIL was about to follow. Quite a few of the stocks were up 20 - 30% in 1 day yesterday! We'll discuss more about the potential here in a moment, but first lets review the rest of the market action.

SPX-   Resistance is overhead.  A pause below the 50 sma may be building energy to break higher, and a break above could see buyers rush in and push it higher.

SPX 10-6

Why is it possible that this resistance wont hold it back?...

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The Runners

Yesterday we saw some of the Energy and Mining stocks running swiftly. There are some small bases that have formed in the past few weeks, and now they may be starting a small leg up. Some had Gains of 20 % in one day, which could just be a mix of short covering and a little buying, but they may still continue higher.  We'll take a look at some individual stock set ups like the one below.

SGY - A break above the 50sma, we see a possible Inverse H&S forming.


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The Real Deal?

We discussed abnormal cycles in the markets in the last 2 reports, and I want to finish that discussion in the Gold report today. First lets review the other sectors and then we'll see whether or not the moves in Precious Metals are likely to be a few more false starts, or closer to the real deal.

My SPX chart from over 1 month ago is playing out nicely. I expected a test of the lows and a test of the break down as shown here.

20015 Topping SPX

SPX -  Sept 29 we got the test of the lows as expected. Now we should see a reversal higher.

SPX 9-29

SPX WKLY - We got that reversal as this week ended and I expect the SPX , DJIA, QQQ, etc to run higher.


This is what I'm expecting next...

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