gold stocks are up today, helps that the US Dollar is down. However I commented yesterday during the market carnage that this is a group to watch that might form lower highs instead of making new lows - a lot of these like BTG, BVN, IAG etc have trendline or MA support below

GDX - Chart Link-

BTG - Chart Link-

BVN - Chart Link-

and again you guys can so what fits your style. Clearly we got the mean reversion today in a big way. Price also closed right on the uptrend line on the SPX, so we could get an oversold bounce of this year. The system is not closing but we could potentially see a bounce off that area and if it would make you feel better to lock something in then do so

here's an image showing the currently short trade on ES. 

as I suspected the system is NOT looking to exit because the momo trending indicator is red - see the left chart. 

If I turn that momo condition off the system would exit today by the simple mean reversion - to the right.

I've included the statistics to both below the chart. The max draw down is the same for both

what I may do today is cover 1/2 and leave 1/2

I held off on closing my hedges/shorts early on the gap down as I thought this had potential to be a trending down day. just watching closely for now

FYI I sent out this  email update on the systems

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Good morning everyone, as you know the market reversed sharply on the hot CPI data. ES S&P futures were up 30 points pre market but then reversed 120 points on that CPI data. Currently SPX cash is down 90 points!!!

The systems caught a very timely short yesterday!  See the chart below!  A good way to think about the systems (except for the breakout) is that they look for periods where the market is out of bounds, where the rubber band is too stretched too far and prone to a reversion back to the mean. Most of the time they exit on that reversion to the mean, but will hold on occasion for trending moves if other indicators align, kind of like that bear long which lasted 5 weeks from July 13th to Aug 22 and a nice trending move was caught. 

By the way the system isn't looking to cover/close out here, I'm guessing the trending momo indicator is red and so it's looking to hold. I will investigate when I have time and confirm that.  That said the minimum goal has been achieved with a sharp reversion back to the mean and thus even if the system holds today I will likely elect to cover 1/2 of it just to be safe. 

Congrats if you took the short signal yesterday. And while the sub system triggered on ES and not SPY, remember that even if futures don't fit your risk profile and are not something that you can trade, you can still follow these trades signals by simply using one of the SPX related ETF's instead (SPY, SH, SSO, SDS, SPXU, UPRO).  The reason I share systems trades on both SPY and ES is to give us the most number of trade opportunities. The 21 systems will catch trades on ES that are not triggered on SPY - thus we get more trade opportunities this way.

by the way the system isn't looking to cover/close out here, I'm guessing the trending momo indicator is red and so it's looking to hold. I will investigate when I have time and confirm that.

that said the minimum goal has been achieved with a sharp reversion back to the mean and thus even if the system holds today I will likely elect to cover 1/2 of it just to be safe. 

again as posted earlier a good way to think about the systems (except for the breakout) is that they look for periods where the market is out of bands, where the rubber band is too stretched and prone to a reversion back to the mean. Most of the time they exit on that reversion to the mean, but will hold on occasion for trending moves if other indicators align, kind of like that bear long which lasted 5 weeks from July 13th to Aug 22

$SPX - Chart Link

GDX - Chart Link- bouncing today - otherwise that nice long trendline over the GDX/GLD ratio is something to monitor. Honestly it's best to see that broken and maybe have a positive symmetry break, then buy a higher low

$BPGDM - Chart Link- no buy signal from the BPGDM yet, MACD is crossing so it could come should this area were to follow through and not just reverse back down again

are you referring to your NQ chart from below? would be best if price held that neckline - also not entirely sure that's an inv H&S with how unsymmetric the left and right shoulders are.

otherwise from that Steve covered last light - this bounce is either a w4 (which if the case may have ended) or we have a 5th wave low and we'll see a larger abc unfold

for the wave 5, it would have been best if price gapped up we had a trend day gap and go, but clearly we did not

UEC - Chart Link- followed through, as you know they recovered yesterday's morning sell off nicely

CCJ - Chart Link- could be flagging

URA - Chart Link- flagging

UUUU - Chart Link- was down this morning but notice it tagged that trendline and found support there

charts are done, a summary has been written. I'm going to record here shortly, it will probably be posted in about an hr or so. futures will open here in 12 min

my writeup summary

Remember our comments back in Julywhen the CPI data came in a bit less than expected and we strongly advised against taking that as a chance that the Fed might shift course sooner than expected. We stated that the Fed's goal is to get inflation under control and back down to their target levels and that they were NO WHERE close to pivoting or even slowing down their rate hikes. Think about it guys, even if we've seen 'peak' inflation (too early to say that) inflation doesn't just peak and go straight down, it stays elevated for sometime and only comes down slowly. The problem with inflation is that it's like a genie that once is let out of the bottle, it's hard to put it back into the bottle. 

Well on Friday the Fed chairman Powell put all that speculation to rest and validated what Steve and I have been saying all long. Powell stated on Friday that its goal is to bring inflation down to targeted levels, his comments "use our tools forcefully, and it will cause some pain to the US Economy".  Also, let's not forget quantitative tightening: The Fed is about to ramp up balance sheet shrinkage! As you would expect the market sold off very sharply on this with the S&P 500 losing -142 points to close with one of the ugliest candlesticks I've seen. 

The bear market rally stalled 2 weeks ago when the SPX tagged its 200 day MA (and near a downtrend line from the Jan highs) and logically sold off from there. Just over a week ago the SPX and the other indexes broke their uptrend channels from the early July lows, which was a 'shot across the bow'. We then favored a lower high and showed a head and shoulder pattern, which is obviously playing out! 

Short-term what I'm now watching for is the rising 50 day MA on the indexes and a lot of individual market sectors. The 50 day MA is now only about 50 points away on the S&P 500 and has a positive slope. Should we get follow through selling on Monday, watch for at least a reaction bounce off the 50 day MA. 

From a wave count perspective, I can count 5 waves to the downside, therefore the option of price moving down to the 50 day MA and then starting some sort of abc rally would then be exited. The more bearish view would have this sell off as a wave 3. The least bearish view would have this as wave C. 

The US Dollar stated resistance just over a week ago, however it may be forming a bear flag and take out that resistance.

Crypto Currencies: Bitcoin sold off from the bear flag like pattern last week and longer term looks quite ugly

Overall commodities posted gains for the week with the DBC index gaining +2.6%. Coffee is note worthy here with a bull flag look on the weekly. Precious metals can't get any short of rally going as usual.

no changes for the reversion to mean systems

remember today has been a yawner - good day for golf or something. This sideways chop almost always occurs after a trend move day like yesterday

$SPX - Chart Link- price is basically right on the 20 day MA now. Also note the largest pullbacks in the uptrend were the A and C waves during that June/July consolidation before the big run - we have not broken those point value pullbacks yet

At the moment the bear long is meeting conditions for a higher low 2nd entry. Honestly I don't know why it didn't enter 2nd and 3rd entries on the two short-term pullbacks in late July and early Aug. It's been years since I've looked at the higher entries so I may need to revisit the logic on those to see if I keep it the same or make some adjustments. 

again the high entry prices as I've covered is only possible on a few strategies such as the bear long, RSI Oversold, and the Bear Exhaustion - they only occur after a lot of profit is already locked in, and attempt to buy a shallow pullback in the uptrend to capture more gains. here's an image from the past showing some of those higher entries

Rare to see the systems catch an entire move like that but they did - better than analysts and traders. 

While we have focused on the very nice ES bear long from July 13th, remember that the same bear long went long in June 1 day off the lows

The bear long went long on June 13th and 16th (1 day before the bottom), and made 147 ES points on that trade. Then went long again on July 13th and has been holding every since

The ES Bear long has made 623 ES or SPX points!!! I don't think too many can say they've made that many points on this uptrend, that

Good morning everyone, I'm checking in here before I head out for the day, waiting on my family to get ready so figured I'd check in

anyway yesterday as you know, the Hi Mid Lo system triggered a short on ES yesterday at 4151.75, ES is now trading at 4119 and is already looking to exit, the trade is up about 32 ES points

realize that this hi mid lo system is very aggressive about exits, it is pure reversion to mean, closes on a close back below the 5 SMA, it does not try to hold trades for a trending bigger move. Do NOT take the system exiting as a sell signal for the market. It got it's trade, the reversion to mean took place, it books em Danno

IYT - Chart Link- said it has a bull flag look and added to the trade setups

XLP - Chart Link- nice pop

XLB - Chart Link- moved through that resistance area

XLI - Chart Link- nice continued moved after breaking out of the downtrend line yesterday

$TNX - Chart Link- really looks like over time could work down to that 200 day MA - that will really f-up the yield curve

$TNX - Chart Link- that weekly really playing out from that doji and wide ribbon

$TNX - Chart Link- this big picture chart - I've been calling for the 10 year to eventually pullback to retest that 35 year downtrend line and then find support there and stage another big rally - anyway that trendline would come in around the 2.4 - 2.5 area

FXY - Chart Link- I've been patient with this one, I bought it inside the wedge, then added to it when it broke through the wedge and backtested the trendline. It then had a nice pop last week (I didn't sell it) and now nice pop today - nearing that first target of mine from symmetry and 50 day MA

GDXJ - Chart Link been out of the coil for a few days - has a level right above

GDXJ - Chart Link kind of an inverse H&S look now

GDXJ - Chart Link trendline base to watch and MA ribbons tight