Like we mentioned in our blog of a week ago, the market has been going down and has wiped out all the gains of the previous week. Out of the 4 stocks which are keeping Nasdaq, QQQ and SPY  up , to day Amazon is up almost 100 points . DJT and DJ utilities are near the lows rather than near the highs. This is not the kind of market that can continue to go up but at the start of a major decline. We have had a major decline in Gold and we still continue to recommend that you should have some gold and gold mining stocks in your portfolio because of extreme bearish sentiment.
There were more stocks down than up for the last 5 days and that trend will continue. All rallies will be short lived. Any negative earnings  can easily decimate your portfolio. Look at Biogen  and Apple.
China decline will have a major effect on economies around the world specially on Japan, Eurozone and USA. The chaos cannot be stopped by more debt or easier terms ( how can you go below zero interest rates) China has been doing many things to control the damage in Chinese stock market but it will fail. Government intervention does not work anywhere.

Here is an interesting article about why you must buy physical gold and gold mining shares
http://seekingalpha.com/article/3355485-what-you-need-to-know-about-chinas-gold-holdings

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We have had a spike in NASDAQ and QQQ  and now  it is being reversed. We cannot rule out a-b-c decline which is followed by another rally to the previous highs.
In the case of SPY, it came very close to the previous highs as predicted in our post of 16th July.  DJI also came close to previous highs. DJI has wiped out five days rally in one day. We cannot rule out right now that DJI and SPY will try another rally to new highs. However low volume and more stocks going down on Monday and Tuesday tells us the the rally may be over as predicted last Thursday as we have warned you about change in direction any day.
NASDAQ was also up on the back of just 4 stocks, Google, Amazon, Apple and Facebook. Russell 2000 (IWM ) and Energy stocks  has been leading on the downside and will continue to do so as it is not easy to manipulate 2000 stocks.
There is no doubt in our mind that GOLD was manipulated on Monday night . Just 5 minutes before the opening of Shanghai market  millions of ounces of paper shorts were instituted so Gold can go down and the bank-sters  can cover their short positions. When USA, Japan and Eurozone are manipulating the price of Gold, it is not easy for ordinary citizens to trade properly except by following the trend. Gold  mining stocks should be accumulated and profits should be taken in DUST today.

 Silver did not decline as much as Gold.We continue to believe that some amount of Real Gold should be in your portfolio. Central banks continue to buy more Gold and we believe that China has now nearly 4400 tons of Gold next only to USA. If Greek citizens had been holding Gold instead of  Greek Euros, they will not be suffering today. Greece is getting more money from Euro zone but they will not pay back  most of these loans.

This year on October 20, it is very likely that China's currency will become part of IMF's SDR and thus will become a  reserve currency. There will be a massive move from Dollars to the Chinese currency. So we are warning you ahead of time. Dollar is on its way to make a new high in the 5th leg up and then we will see a major  decline in dollars. A country which has had deficits in all of the last 15 years  will not continue to go to new highs. We have created 8 trillion dollars worth  paper money just since 2008. We owe more money to the rest of the world than any other country.

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Dollar has strengthened and Gold Silver and Oil are going lower. Gold may be a great buy here as a hedge against any currency devaluation,

Tech stocks keep on moving up but most of the stocks are closer to lows than Highs. The direction can change any time.
Our comments remain unchanged fro last  Thursday

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Looks like the market wants to go back to previous highs established in May. Not every stock will go back to those highs. Momentum stocks will do that others will not do that like DJT and NYA . Thus there will be a lot of divergence between the major averages which only shows weakness of the real market. We do not want to chase this market because  it is earnings season and many stocks will beat pre announced low forecasts. This is nothing more than manipulation by insiders.
Dollar keeps on going up against the Euro where printing of money is rampant with Greece in focus. Greece will get $90 billion worth of Euros  by making false promises. Once they get the money, they will never be able to pay the loans.  European stocks are going up in devalued euro currency. So what is new?
China is also lying about the 7% growth this year.That is totally manipulated. When all  the stocks are allowed to trade , we will find out who is swimming naked.

At any rate , when the realty sinks in all stocks will start going down and go back to October lows after this rally ends. Gold made a new low but Silver did not . So rally in Gold can start any time but we can wait till it goes above the 15 day moving average.

IWM

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