Bear Rally Running Out of Steam

By Murray Dawes, Saturday, 20 August 2022

Markets are drifting aimlessly while we wait for US traders to get back from summer holidays. I remain convinced that we are witnessing a bear market rally that will have a use-by date in the next few weeks or months.

Markets are drifting aimlessly while we wait for US traders to get back from summer holidays. I remain convinced that we are witnessing a bear market rally that will have a use-by date in the next few weeks or months.

High UK inflation figures during the week reminded investors that inflation hasn’t been tamed yet, and bond markets sold off. Gold and Bitcoin [BTC] reacted to the rise in yields by turning down after a solid rally over the past three weeks.

The gold chart has turned bearish in the short term, so the focus should be on the major support level at US$1,680, which is only $70 below the current price. If gold falls below there, we could witness a huge fall in the gold price.

I reckon that would set up a buying opportunity, but current gold bulls should be prepared for some fireworks if the support can’t hold.

In today’s ‘Closing Bell’ video, I show you why I think the S&P 500 is setting up for another leg lower and point out the bearish setup in gold. I also update you on the three stocks I told you about a few weeks ago. They have all had a good run, so I hope a few of you managed to jump on.

Until next week,

Murray Dawes Signature

Murray Dawes,
Editor, Money Weekend

All advice is general advice and has not taken into account your personal circumstances.

Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

Murray Dawes is our resident expert trader and portfolio manager. He is a former Sydney Futures Exchange floor trader who went on to design custom trading systems and strategies for ultra-wealthy clients (including one of Australia’s richest families). Today, his mission is to help ordinary Aussie investors make profitable investments, while expertly managing risk.

He uses his proprietary system for his more conversative and longer-term-focused service Retirement Trader…and then applies the same system to the ultra-speculative end of the Australian market in Fat Tail Microcaps (this service is strictly limited and via invitation only).

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All advice is general in nature and has not taken into account your personal circumstances. Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

The value of any investment and the income derived from it can go down as well as up. Never invest more than you can afford to lose and keep in mind the ultimate risk is that you can lose whatever you’ve invested. While useful for detecting patterns, the past is not a guide to future performance. Some figures contained in our reports are forecasts and may not be a reliable indicator of future results. Any actual or potential gains in these reports may not include taxes, brokerage commissions, or associated fees.