NY stocks were off almost 1% as the expected negativity manifested in Monday's trading. I expect more downside action in the next couple of days that should take us to 11,000 and below.
Oil staged a heavy retreat, however, and touched below $120 finishing around $121. I had expected Oil to do better today, but I still think there's a good chance it will hold on to these levels for the rest of the week. That said, the downside risk to Oil is clearly greater than any upside movement, so I would be reluctant about taking any new long positions. September will see another bonafide rally once a more sturdy bottom is formed in August.
The Gold decline today to $907 has me re-evaluating my forecast for this week. I think my previous $930 target would now require a miracle. A more likely scenario would be for Gold to keep dropping this week, perhaps below $875. There is a real possibility it will test its 280-day moving average at $850 over the next couple of weeks. The Sun's movement towards a conjunction with Ketu may therefore be the signal of an end of the current phase of prices above $900.
Another rally will begin starting in the last week of August.
