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A quick update....I have some longer term indicators on the DOW suggesting that a decent rally is about to take place.  Therefore, I went long a swing trading position on today's close.  Went long the DDM (DOW JONES DOUBLE LEVERAGED ETF) at 59.34.  My will may be tested but that is okay since I have a very small size on.  I do NOT trade big sizes when I trade against the trend.  That is a big NO NO.

It is our opinion that todays action in the coal sector has finished their bull run for some time and a NASTY down move is now underway.  It could collapse here.  There is no shortage of coal and the markets speculation made these stocks parabolic.  Chinese demand in anticipation of the olympics could have had alot to do with the spike.  Additionally, the oil mania has rallied coal stocks as coal is considered a cheaper alternative to oil.  Many of these stocks rallied nearly 300% in 2 months time.  The faster they move up, the faster and sharper the drop will be.

Let's review a couple of the big movers today. 

This Past Week In Gold
by Jack Chan

GLD - buy signal this week.

SLV - still consolidating

GDX - buy signal this week.

Ultrashort ETFs have really gained in popularity and most of them (like SDS, DXD, QID) now have enough volume to make them decent trading vehicles.  The actual stock, that is.  The options are another story.

In pulling up the weekly charts on the gold sector, I noticed something that I found pretty interesting.  Over the past few months, the $XAU has actually been forming a massive head and shoulders top.  Now, nothing has happened as far as a breakdown but I wanted to alert you to the potential.  Sure gold stocks were up huge today but nothing has been proven as of yet. 

This market has two levels that I am watching closely, 162 on the downside and 200 to the upside.  A weekly close above 200 will invalidate this signal while a close below 162 will confirm it.  It could get ugly if that happens.

Notice how we have a double shoulder on each side of the head.  Something is brewing.  Let's stay alert on this sector.

Just a quick update here.  It is about 3:15 est and thought I would drop a quick update on what I am seeing.

First of all, the DOW Jones broke to new multi year lows today.  Very ugly with monster price move down today, over 300 points as I write.  The question is how low do we go here on the short term.  Well, the DOW has dramatically dropped off in volume compared to the lows in Jan and March but a close below those two levels would maintain that these market can float lower.  The Dow is definitely the leader to the downside and so are the banks, which have shown NO signs of letting up.  This is getting ugly, but ugly can get uglier.  Short term, I expect a bounce but on a more intermediate term basis, look for low to mid 10000's on the DOW Jones.

Since our last update on the banking sector, this market has continued to free fall with no end in sight.  As the markets continue lower, the banks lead them and with the credit problems that continue to put a damper on things for the banks, the worst seems yet to come.  From what we have been reading, only 30 to 40% of the actual write downs have been made by the banks.  The market knows this and is expecting some of the banks to go bankrupt or be taken over at bargain basement prices.  We know the US banking sector is in deep trouble and we know that these stocks will continue to head lower but the show must go on.  We also know that the Fed will not support any more of these collapses.  Take a look at the Fed's repo lending activity.  That should give you a clue that they no longer wish to inject endl

This Past Week in Gold

by Jack Chan

Summary

GLD – on sell signal.

SLV - on sell signal

GDX - on sell signal

XGD.TO - on sell signal