We are on the road this week and thought this move in gold is very important to pass along. Our initial bullish note was on October 15 where we initiated a long position in Gold bullion. We would be adding here as gold is breaking above its volatility bands and 50-day average. Our initial target is $1590.

We will be traveling this week and back in the office next Monday. In the meantime, we wanted to get out our current thoughts on these three indices, and what it would take to turn these indices bullish. There will be no Technical Tuesday this week.

For the U.S. markets, we wanted to focus on the weekly sell signals that were generated a few weeks ago, and therefor avoided trying to catch the short-term turns. Both the S&P 500 and Dow Transports have rallied back to their ellipse resistance zones, so we need to see how they trade into this area.  Both the DAX and Italy's FTSE MIB have both cleared their ellipse sell zones with good momentum. We are back on the bullish call for these markets. The Nikkei remains resilient and on target for the 23000 zone.

We are getting long gold right here and looking to aggressively adding in the coming days. After consolidating off the September high, gold looks poised to start another leg higher to surpass the recent highs.

Although we had some recent short-term buy and sell signals in the S&P 500, we have yet to see any buy signals based on the important intermediate-term time frame. The sell signals we have been talking about in recent weeks remain in effect. The Dow Utilities and Nikkei remain favorable, while China's Shanghai Composite is close to generate a sell.

We are on alert for any buy signal in the days and weeks to come.

Given the short-term oversold market condition and that of a number of stocks, we are closing SLAB/XLNX pair which was up +4.89%.  Closing long AIR short HEI pair for a small loss of -1.49. HEI came very close to its target and likely to pop from the oversold. AIR is getting weaker.

We would be covering shorts in WTI Cruide Oil and put on a tactical long with a closing stop at $51.

The sell signals we highlighted on September 24 remain in effect for a number of the U.S. and European markets. At a minimum, we have been expecting a 5% - 6% decline at which point, we need to see these markets hold key support levels. We would be very concerned of the August lows are breached in a decisive manner which would likely negate the long-term targets.

KSU is into a Make or Break (MOB) target band and has stalled out on a momentum basis. Although the long-term trend is up, we can see risk to the $125 area short-term. The stop is tight, so if it's going to work, this is the spot for it to put it on.

Short Waste Mgmt - WM. Target Price $110.00 (4.13%)

Short HEI. Target price of $116 (or 8.86%)

Would short here and any near-term strength toward $65.80.

Lots of changes this week as we had weekly ellipse sell signals triggered on the close of last week. The sell signals were triggered for the S&P500, Nasdaq Composite, Russell 2000, Mid-Cap (MDY) and the Dow Transports. The long-term trends remain intact, but we do see about -5% downside. We would like to see how the indices hold their long-term uptrends in the coming days/weeks.

In Europe, the DAX, CAC and Italy's FTSE MIB appear to be failing at resistance. We went long the DAX and CAC last December and will capture about +20% in each index. We are short the Hang Seng and see a minimum of -5% from here.

The drivers for the idea are: 1. Strong multi-factor model score for GOOG vs. FB. 2. Weak technical structure of FB as it breaks its one-month uptrend

Two drivers for the idea.  1. Strong multi-factor model score of EBAY vs. ETSY. The relative performance of EBAY vs. the S&P 500 is a heavy weight in the model.  2. ETSY has rallied into an area of overhead supply/resistance, and is overbought short-term.