Tuesday, January 25, 2011

David Bannister: Gold Remains Bearish, SP 500 Appears to Be Topping

Well, our time line for the crude oil pull back is upon us this week. Right or wrong we all fully backed by safe stops being in place. And David Banister appears to be making the same call in gold and the SP 500. His most recent forecasts for the SP 500 and Gold have been calling for interim peaks in both around Mid-January. Gold, he told his subscribers a few weeks ago, was definitely topping and likely to drop now to $1270-$1280 per ounce before resuming the Bull Market advance. The SP 500 he had forecasted a 1285-1315 topping area since the 1175 pivot lows on that index, and we are very close as well in that regard.

Gold has been in a 9 plus year bull market since 2001 and has another 3 years plus left on this Bull run. However, pauses must occur along the way and this should be a 4th wave corrective Elliott pattern if his views are right. This is taking the form of a 3-3-5 correction from the $1430 top. We are in the final 5 waves down now, and it’s about to get ugly near term so strap on your seat belts. His chart forecast is below and if he is right, there will be excellent opportunities to pick up some good Juniors and also the precious metals themselves around that $1270-$1280 area. Following this correction, we could have a run to about $1515 per ounce, and he expects this entire pattern to take 6 months to a year to play out from the $1430 top to the $1270 ish bottoms, and back to $1515.

The SP 500 is completing the final 5th wave movement from the 1010 Jul 1st lows this past summer. This is only the first full wave pattern movement of a big 5 wave leg up from July 1st. What this means in English is we have a near term top likely in the 1285-1315 areas, followed by a wave 2 correction to around the 1175-1180 areas. Sentiment right now is running at major extremes last seen at interim peaks in January of 2010 and April of 2010 where he had also forecasted tops within days of the peaks. Banister is looking for the SP 500 to end up around 1600 on the index after this coming wave 2 correction, but he reminds us to take it one pivot and step at a time. Below is his forecast chartwise:

If you would like to benefit from learning more about Elliott Wave based forecasting using David Banisters methods, which have been historically accurate, please check him out at Market Trend Forecast.com There is a coupon available if you’d like to subscribe or you can sign up for free occasional reports.


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