Whats A Melt Up?

What is a 'Melt Up'?  Most of us are familiar with a 'melt down' in the market,  so basically it is the opposite.  Either a stock or an entire sector can just sell off or get bought up into extreme levels, and then it still keeps going, not allowing the cautious investor an entry.  It may not be straight up everyday, it may run, pause, run again and again until the move exhausts itself.  This is what we will discuss in the weekend report, because it is possible that we could be seeing a 'Melt Up' in Gold and precious metals. They can last for weeks, with minor pauses.


This is an example of a small melt up. I used this chart to show the danger of trying to guess the top by buying DUST or Shorting Miners last week. You can ignore the writing,  just look at the melt up.


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Safety First

Each trade that you take has some risk to it. Some trades are low risk  set ups with higher probability of success and others are just plain risky, depending on the set up.  We will discuss that a bit later in the report. 


SPX- The Fed didn't change this chart very much.  I still see similarities between the double bottom in Aug & Sept, but it is weak. Notice the candle for Wednesday rallied on the Fed and gave it up.  The buy the dip crowd is weak. We are not oversold yet, but getting there.

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Moving Forward On A Fed Wednesday

Today is sort of a Fed Wednesday. It doesn't mean that there will be some big surprises, and in fact I do not expect anything like that, but I didn't want us to go into this blind folded. Certain areas of the market are due for reversals in my opinion, and a Fed testimony before congress can act as a catalyst, even if nothing new is said. Lets just Look at the charts.


Tuesday the NIKKEI was down 900 points, and it is currently down another 400 this morning, but...


They couldn't get the sell off in the U.S. going.  THAT should have sold off the U.S. markets if they are going to drop In My Opinion.   I've been expecting a bounce, no change.

SPX 2-9

I have mentioned that when I look at the Banking index, it broke down and is struggling at lows...

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