Time and Price balances should always be taken into account when considering the likely timing of a trend exhaustion.

Add in other macro factors like a potential trend reversal in the dollar, which is bearish for stocks, and traders can be much better mentally prepared when the actual trend/price reversal occurs.

(Note that the third turn window was an acceleration, not a reversal and was the August 22nd start of the  “Softbank-Gamma Squeeze” exhaustion move.)

Given that all signs indicated a top today +/- a day or two, and that today was an expiration day, the odds of a top  today/Monday were as good as they really ever get.

Add that to the fact that all held up the market today was the fib fan line buyers, and macro factors are unfavorable, and that means that the odds of a gap down over the fan line on Monday again remain,  statistically speaking, exceptionally high.

The #1 macro bet coming into the year was short the dollar, and of course that left the dollar positioned to reverse. With last week seeing both a weekly -9 setup and sequential -13 setup , funds began covering en mass.  The unfolding reversal of the dollar downtrend is the biggest hinderance to gold. 

Relatively speaking, gold is a very close functional derivative of the dollar. So, until the dollar exhausts this move higher, gold is going to be a source of liquidity for all the funds caught on the wrong side of the dollar trade every time it dips. 

May have already been noted here, but this type of symetry is always something to pay attention to. 

Dollar recycled nicely since overextending in recent days and gapping into the Fib fan line. It is now in a much better position to challenge it.

As rates have also fallen back from the overestended positions I showed the other day as well, they are now also potentially more supportive of a move higher in the dollar. 

That is not just any old trendline, that is the Fib Fan line from the rally off the March lows. 

Logical move would be for the ten year to rate to pull back and test prior resistance turned support. 

Probably not a lot of people here looking at this support in long bonds; however, money moving back into bonds will fuel a big rotation when everything turns, which is very likely to occur by next Monday. 

Right into the Fib Fan line. 

Pullback entry for SLV @24. More aggressive would be 24.56-65. 

Back testing...

gapping clear above the line

While most traders dont have the wherewithal to monitor them, the quant programs are still moving massive amounts of liquidity off the Fib fans lines from 09....

March low is now the 50% retracement to the bear market low, that type of symmetry doesn’t  occur completely randomly.  

Thanks

Your welcome.  As you can now see, that was the holy grail “first pullback” entry for this reversal. I try not to be too predictive here, but wanted to flag it for those who could recognize what it was. 

After failing earlier at the center channel line, Spy is backtesting its Oct 26th downtrend line.