Stock Market Big Drop Still Looms, GDX Pulling Back

By: Brad_Gudgeon

Last time I wrote, I was expecting a large drop in the stock market. Early on, in my blog, I stated that I believed I was wrong and that the BIG drop would not occur until late October/early November. I stated that the 7 week low could occur as early as October 13/14. I also stated that there was a TLC low due in that time frame. Also, there was the fact that Jupiter was making a trine aspect to Pluto by October 15 and that was potentially bullish, at least in the short term. Also, I was concerned that GLD and GDX were not confirming the recent move up.

From October 14 to October 16, the SPX rallied from about 1990 to near 2033. I see many money flow and momentum divergences on that move up, and believe we will have a short, sharp drop into October 20th to near SPX 1972. We have a Hanging Man on the SPY, the recently developed 21 TD top from July 20th (series July 20, August 18, September 17), and a Y wave of an XYZ bull flag. In addition, we have a Bradley turn due October 17th, Venus opposing Neptune after the market closed Friday, while Mars conjuncts Jupiter on October 17th. The two days following OPEX October tend to be very bearish, and we also have a three week low due on October 20th.

All this action points to an important topping process on both the GDX and the SPX. I believe the top of this move off of the September 30th/Oct 1 lows is still forthcoming, but we still have the 5/10 week lows looming around November 3; so overall, l I believe THE major top of this counter trend rally is NOT yet in and will not likely occur until around Oct 26/28. Bottom line: a quick scary sell-off into Tuesday where the strong money starts buying this market once again setting us up for an end of month top of significance in both markets. This will likely be tied to the FED meeting of October 28. Ironically, we have Mercury and Mars crossing the same spot Mercury crossed in late August before the August 18-24 collapse, and that is the recent solar eclipse. This follows George Bayer's rule of the relationship between the Sun and Mercury.

My own e-wave/cycle read is suggesting a possible drop to the upper 1700's SPX by November 3 (with a possible SPY below 1760). GDX is coming off of an IMP (I've gone over IMP's before) and is due to go just under Touch Point 1 near $15.08/.12 by Tuesday or Wednesday next week. One more rally is expected in gold and GDX into late October before going back into the bear market mode.

S&P500 Hourly Chart

GDX Hourly Chart

If this pattern and cycle continues in the stock market, we may not see a final low of this bear market move until late December or early January to my long time target of SPX 1700 . This would also guarantee the chop continues.

Brad Gudgeon

Editor of The BluStar Market Timer

www.blustarmarkettimer.info

The BluStar Market Timer was rated #1 in the world by Timer Trac in 2014, competing with over 1600 market timers. This occurred despite what the author considered a very difficult year for him. Brad Gudgeon, editor and author of the BluStar Market Timer, is a market veteran of over 30 years. The website is www.blustarmarkettimer.info To view the details more clearly, you may visit our free chart look at www.blustarcharts.weebly.com Copyright 2015. All Rights Reserved

Copyright 2015, BluStar Market Timer.  All rights reserved.
Disclaimer:  The above information is not intended as investment advice.  Market timers can and do make mistakes.  The above analysis is believed to be reliable, but we cannot be responsible for losses should they occur as a result of using this information.  This article is intended for educational purposes only. Past performance is never a guarantee of future performance.

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.