THE MICIK MARKET LETTER
Up, Up, and Away for Stocks & Gold?

Alan Micik snippet
Posted Oct 20, 2013

U.S.Stock Indexes:

In our 9/28/13 Update MML noted:

“All of the U.S. Stock Indices have a “high-zone” due in November. Our experience has been that when a stock, or a group of stocks (IWM) resist a market decline (when they shouldn’t), the situation is bullish.

Therefore, MML remains in the “stand aside” mode for the DIA and SPY (laggards) and seeks no SS, but MML is bullish on IWM (a broad-based leader). More precise “high-zone” dates will follow. The IWM (and the QQQ), based on our experience, are likely going to drag the other Indices higher into November for a collective “high-zone.

Thus, the IWM and the Q’s remain in a position that “might” launch a parabolic move in their respective Index. Such a situation has occurred many times in past market cycles as leadership ebbs and flows among the key Indices (think blazing Internet stocks in 1999 and 2000 while the Dow just meandered higher).

The below chart of IWM (a high-risk, high reward market) is from that Update, and the other chart is from Friday’s close. As one can observe, IWM has rather convincingly launched an “Up, Up, & Away” parabolic move.

(Click on images to enlarge)

In our 10/20/13 Subscriber Update, MML details our proprietary cycle (PC) forecast for the Russell 2000 (IWM), and how to navigate through this parabolic move.

$U.S. Gold:

In our 10/16/13 Update MML noted:

There are no changes in our Long-Term or Intermediate-Term (4-9 months) outlook from our prior Updates. In our last Update MML noted this in regards to the short-term trend:

“All 3 trends are now Bearish for the Fundamentalists and the Chartists as negative short-term Sentiment exploded last week when the August low was broken, so this opens the door for a “sold-out” market rally as described above. If Mr. Gold Market elects this upside opportunity on all 3 trends, it may be substantial since long-term Sentiment measures have been contrarily bullish for months.

Should a definitive consensus develop regarding the down H&S (Head & Shoulders) among the majority of Chartists, MML will increase the probability factor in favor of an EA (upside reversal).”

The Chartist’s consensus since last Friday’s (10/11/13) Stops were hit has become extremely bearish as we suspected it would, and contrarily that means the probability of an EA move higher is alive and well. This is exceptionally bullish if our EA activates! Here are some scary, but beautifully contrarian headline titles:

• Gold Breaks Down, Poised to Drop $90. (10/11/13) Read here.

• Gold Implosion Imminent? (10/14/13) Read here.

• Gold May Test This Level ($1,250) As Flight to Safety Fades. (10/13/13) The low since that date was on 10/15/13 at $1,251. This survey also recorded 83% weekly bears. Read here.

• Own Steel Stocks, Not Gold…Gold Is Acting Crappy. (10/15/13) Read here.

The consensus above is only a partial list of the Chartist’s responses to last Friday’s (10/11/13) Stops being hit. Try as MML did we did not find one bullish short-term forecast among everything we read (other than MML’s potential upside EA move). Chartists are now bearish in a big way, and MML likes this setup.

Bottom lines:

MML believes that both the Fundamentalists and the Chartists are extremely bearish at this time. Such a rare combination typically produces a Major Rally in any market. The risk of a severely lower market is greatly diminished given their agreement that gold must go lower, since sellers of either persuasion would have already acted. Who is left to sell?

This is the best technical setup for the upside in gold MML has observed in 2 years.

Is an “Up, Up, & Away” move coming for gold?

More follows for Subscribers…

If you would like to review our current MML forecasts for gold and other markets, consider a subscription (details are listed below). In deference to our Subscribers, we have a 4 day calendar “Quiet Period” from all Subscriber Updates before any Posts.

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Al Micik
email: atmmail@sbcglobal.net

The Micik Market Letter (MML) covers opportunities in any market sector (U.S. Stocks, silver, etc.) when low-risk opportunities are identified for the investor and/or trader. Ongoing coverage is provided for gold and physical gold hedging strategies. Individual shares in any sector are generally not covered, but nor are they excluded. Unlike other market reports, we do not have regular “publication dates,” as the markets create the dates of action, and thus the communication to our subscribers. MML uses proprietary indicators (combined with technical analysis and contrary opinion) while applying 38+ years of market experience in stocks, options, and futures.

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