Gold And S&P 500 Forecast
Chris Vermeulen | Jan 05, 2015 11:05AM ET
Our long-term subscribers have been following the Gold and S&P 500 markets with us for years, and for sure last year was full of volatility in both. Right now we are continuing to stay on the sidelines in Gold until we can see a confirmed close over $1232 per ounce (US Dollars). We like to keep it simple and avoid a lot of the noise that the charts on a daily basis can bring, as well as day to day and week to week volatility.
The reality is that Gold has been in a Bear Cycle since the top in 2011 and over the past year or so has been attempting to establish a base pattern from which to bottom out and emerge back into a Bull cycle. However, the technical evidence does not yet support the Bull case and in fact suggests there is still potential for a final drop to the $1,050 per ounce area before a final washout low takes hold in 2015.
With that said, we are not biased in either direction and prefer to let the price action dictate our views and not our personal biases. We think a close over $1232 would represent a bullish change in direction as it represents the 30 week moving average line on weekly charts. We like to use this big picture charting for both the S&P 500 and Gold because frankly its simple and it works. Yes, we can drill down on Elliott Wave patterns with the best of them and we do so as appropriate, but for the purpose of the general investing audience lets avoid that boredom and short term labeling issues and just focus on the big picture.
Over $1232 we start to get interested, under that we are out of the pool on the sidelines:
Now let’ts take a quick look at the S&P 500 index. We have been calling this Primary wave 5 of the Bull cycle from March 2009. Others may certainly disagree but our view is for a low end target of 2181 and a high end target of 2525 for the SP 500 before Primary wave 5 ends and we start another bear cycle. We are certainly willing to adjust our views based on action but those are our current intermediate to longer-term forecast points for the S&P 500. Shorter term, keep an eye on that “Gap Fill” area on the daily S&P 500 charts around 2012-2015 as likely to fill as early 2015 trading gets underway. We caution our stock trading and market forecast subscribers that early January volatility is notorious and caution is warranted in the first few weeks until we see where the rotations are taking place , tax selling ends, and other changes are completed by portfolio managers. Then of course earnings start coming out, so January as a rule is tough for most investors and traders.
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