Strong selling comes in to the S&P

I mentioned early today to watch the 20 MA.  It was broken and the market closed well below it.  This doesn't mean the market can't rally back, but a solid probability trade would be trading a test of the bottom side of the 20 MA.
Note the Volume increase today, well above average.  If this 5 wave has completed, there will be a 3 wave structure to the downside.  I am not going to call a massive collapse but i wouldn't be surprised to see a 1155 within the next couple of weeks.  The 200 MA will be support there and the 50% retracement of the impulse wave.

Trade update:  Endeavour Silver Corp (EDR) Silver mining company on the TSX.

Entry: 6.01 (on the 27th, and held with the expectation that gold and silver will get a bid)
Exit: 6.29 (first sign of trouble after a strong morning on the 28th)

Currently holding AXR, with the expectation of a short term bounce in Gold / silver.
AXR is very similar to EDR, however, it is not as extended.

Current entry is at 6.60, and decided to hold over the weekend, as Egypt has really heated up, causing issues with the oil supply.  This fear in the middle east region will in my opinion bid up the price of gold / silver.  In addition to that, there is a possibility that QE3 is coming our way.  By March the debt ceiling will be breached so the government will have to go to congress to raise it. 

Gold and silver is in a correction, until a new high is breached I will have to stick to that view.  I am very cautious about these mining company, however the past couple of days many I have been following are popping, 5-10%.  EDR, AXR, SBB, FVI, AVL, GPR, P, FR all on the TSX.  Mining stocks are quite volatile, so tread carefully.

Beginning of the end?

1300 proved to be a massive level of resistance.  Today so far a 1.26% drop in the S&P500, could have devastating consequences.  Keep your eyes on the 20 MA and how much support it provides to the price action.  If the 20 MA breaks decisively this could be the turning point. 
Additional support for this analysis is the Slow Stoch, as it now is showing a bearish divergence.  Therefore, momentum to the upside is fading.  The volume today will be a tell tale sign of things to come.  If this move remains > 1% on strong volume, be cautious on the long side.  

S&P Almost tags 1300

Well the S&P 500 finally has crawled its way up to the 1300 level.  Psychology level (just like down 12000), and coincides with the 1296 projection based on previous analysis.

This level would mark the end of a typical wave 5.  Therefore, if this count is correct, a correction in the general market should be expected.  The depth is yet to be determined however, a deep correction is not out of the question.  The depth will depend partially on what the FED does after QE2 runs out.  The Debt ceiling Is being approached quickly, some projections kicking around is by the end of March congress will need to pass legislation to raise the ceiling.  There is a large amount of talk about the debt ceiling by politicians recently, so expect more media coverage during February.  

Gold heads down as expected

Nothing goes up forever.  and as expected gold still is making its way down today, hitting 1330 today.