US Stock Market - Buy Signal Triggered on October 13, 2022!

A daily chart buy signal was triggered in my proprietary trading system in the S&P 500 Index ETF (symbol SPY) and also the Nasdaq-100 Index ETF (symbol QQQ) at the close of trading on October 13th, 2022. Despite a downside reversal in most share prices on Friday, October 14th, this latest buy signal remains intact.

Rarely have I seen so much bearish sentiment among often-wrong traders and investors, which must be considered a meaningful contrary indicator favoring a significant bounce in share prices over the very near term.

While the bearish case is compelling for stocks (i.e. hawkish Fed, historically high inflation reports, the war in Ukraine, potential nuclear armageddon, threats from China relating to Taiwan, and more), I believe that most of the potential bad news for stock prices is already discounted at current levels where the S&P 500 is now down about 25% for the year so far. 

Bears outnumber bulls by almost 3 to 1 in the latest sentiment figures from the American Association of Individual Investors, and most pundits and one very loud former U.S. Treasury Secretary are calling for significantly lower share prices ahead. Is there enough "blood in the streets" to justify buying stocks here? Probably Yes!

There is an interesting technical support level that was tested last week in the S&P 500 Index. Fifty percent (50%) of the gains in the S&P 500 Index, from the panic low posted in late March 2020 to the bull market top set in early January 2022, were retraced at one point in last week's price action. Is that enough "blood" lost to serve as a catalyst for a decent rebound here? Again, probably Yes!

Here are two interesting charts for your review:

S&P 500 Index ETF (SPY) with Daily Chart Buy Signal on October 13th

Nasdaq 100 Index ETF (QQQ) with Daily Chart Buy Signal on October 13th

Gold Buy Signal

At the September 30th close, weekly chart buy signals were triggered in the popular Gold ETF (symbol GLD) and in the Gold Mining ETFs (major gold mining stocks ETF symbol GDX and the junior gold mining stocks ETF symbol GDXJ).

While the S&P 500 Index ETF (symbol SPY) fell 3.02% last week, the Gold ETF (GLD) rose 1.08%. Against that backdrop, most gold and silver mining share prices soared!

The Major Gold Mining Shares ETF (symbol GDX) jumped 7.49% last week, and the Junior Gold Mining Shares ETF surged 9.07%.

Bottom Line: A major new bull market in gold, silver, and related precious metals shares has clearly begun. Gold and Silver mining shares could easily double over the next 12 months as the Federal Reserve pivots from its current hawkish monetary policies toward a more neutral-to-dovish posture in the face of increasingly disturbing (recessionary) economic data to be reported on the very near term horizon and over the weeks and months immediately ahead.

Gold ETF (symbol GLD) with Proprietary Weekly Chart Buy Signal

Major Gold Miners ETF (symbol GDX) with Weekly Chart Buy Signal

Junior Gold Miners ETF (symbol GDXJ) with Weekly Chart Buy Signal