This no-volume, no-participation and no-fun tape is a waste of time to a large extent. I'm focusing on finishing my intraday trading by 10:30am PST and working on the various projects I have on the go for the last half of the day. Unless things pick up I suspect this will be my schedule until year-end.
The McClellan oscillator had a small change today so expect a big move tomorrow. Up or down? Your guess is as good as mine although I am positioned short with a VERY tiny position. No room for big bets nowadays.
McClellan Oscillator
GOLD
The big hype with respect to the price of gold these days is getting feverish to say the least. I've mentioned previously that the only retirement funds I have invested are in the precious metals sector (25%). I plan on banking those gains sometime next year as I think both gold and gold stocks will get hit hard along with the rest of the equity markets.
The two primary reasons for exiting these positions are (a) the increased correlation of gold vs equities that we've seen since the March lows and (b) the cycle work as per Charles Nenner.
With respect to the correlation, I feel very confident the markets will correct viciously to the downside next year. It doesn't matter what stock you hold - everything will go down.
Correlation SPX vs. Spot Gold (Daily timeframe)
Note the parabolic move we're seeing is a classic 'pile on' in a market that is relatively small. When things start to accelerate downwards, get ready! Long term, however, gold is a phenomenal investment.
With respect to cycles, well, I'll let Mr. Nenner explain it in his own words.
FORECAST
As usual, here is the updated forecast. Regardless of whether it is a good fit, we should see an increase in volatility heading into mid-December. Giddee up!
Intraday ES Forecast
Here is a great look at how realized volatility has come in on both a daily and weekly basis.
Daily Volatility
Weekly Volatility
