The S&P (and Dow, Nasdaq 100, and Russell 2000), Silver and Gold are in “mature” Balance areas from an Auction Market perspective. This is one of the two market conditions recognized in Auction Market Principles and almost always portends an eventual sharp break. The US stock indices continue to fail all rally attempts. The washout scenario discussed in yesterday’s blog post is still in play.

Auction market concepts are not predictive; they just help identify the probability of a market being in a specific condition from where a trending move is likely. This is certainly the case now in the markets mentioned above. I favor a downside resolution in the indices and the precious metals, but if I’m wrong about the direction I am not going to hesitate to adjust and jump on the train going the other way.