So far, the markets are generally positioning themselves for a turn at the end of September. The Dow has traded sideways since Thursday, trying to cling to the rebound. We need a closing today ABOVE 17007 to firm up the market, and a closing below 16632 will warn that the Dow is weak going into September.
Gold fizzled out quickly for we are in the middle of a flight to quality and that means people TRUST government debt. There is no fundamental safe-haven status for gold to rally under the current conditions. Here we would nee a closing above 1225, whereas a closing below 1168 keeps gold bearish.
The euro closing resistance stands at 11240. Here too, we are not in a position to take off to the moon.
It looks like this is the peak in government. Even Bernie Sanders is closing the gap with Hillary in Iowa. The Democrats hope for a landslide if Trump goes 3rd Party and the established Republicans fear Trump because he will not allow Boehner to control the party or Congress. So this time it appears our model is correct so far that this is the peak in government for this ECM turning point.
