With the bulls and bears jostling for control of the market right now, there's an extremely interesting underlying story brewing that you may or may not be aware of, so we're going to have a technical look today at what I consider to be the "Big 3" in the market these days, gold, oil and tech. Since two of the three seem to be problematic for the economic landscape and tech is the growth driver, these three sectors of the market deserve some attention right now. As I type, the major indexes are getting awfully excited trying to retrace and erase the losses from the last week or so. However, I wouldn't get overly exuberant here as one day does not a rally make. It's quite possible this market can turn on a dime again since we've got options expiration at the end of the week. Volatility is doing its best to catch traders on the wrong side of the options trade but it's important to note that all we've done on the hourly chart is rally to another potentially profitable short entry for the market to go lower. My best educated guess is unless the NDX can trade above 2760, we're likely headed lower. If it can breach that 2760 level, the market could go parabolic to the upside. However, until proven otherwise, we'll stick to our theme of late which is looking for lower levels. Is it Time for Gold to Implode? About a month or so ago, we brought the monthly gold chart to your attention pointing out what could be a very large reversal indicator in the making. Gold has continued to show weakness in recent weeks but I'm sure you're aware that in recent years, even when the rest of the market has struggled, gold has continued to be a very large pocket of strength. Without going into too much detail, it's our opinion that gold has been the biggest benefactor of questionable monetary policies and uncertainties. Simply put, gold has been a safe haven against what is perceived as weak currencies around the world. So why is gold now having a hard time rallying to new highs? Is there an underlying theme that our administration's monetary policies have done the economy some good and now there's not as much fear? The first question is fact, the second question is very speculative in nature and it's my guess that the gold chart is going to answer that second question for us sooner than later. I've included a monthly chart of the GLD, which is the largest Index ETF for gold. As you can see, back in December of last year, the GLD imploded on a short-term basis only to find strength and re-rally back above a key moving average of ours in January. Then, just last month, the GLD closed back below that key indicator thus confirming our sell signal. Bingo. That's a very significant reversal indicator. I suspect gold has seen its highest levels for a good while now and the rest of the market may likely find itself wanting to move higher on economic confidence over the mid-term. If the GLD bucks the reversal indicator and rotates the shorts right out of their positions taking the GLD above $175, then that would only suggest there's still some monetary uncertainty out there, which likely won't bode well for the rest of the market. Time will tell but we firmly believe if you're going to speculate on the market, you've got to be multi-dimensional and looking at a lot of different indexes to formulate a strong opinion. I will say this... in my opinion, there's about an 80% chance gold has seen its highs for a while. I will likely be looking to get short gold on strength and long the NDX for quite some time once this market consolidates enough. Black Gold - A Speculator's Dream... a Consumer's Nightmare. I mentioned quite some time ago that oil was likely going to move higher and sure enough, it has. I also very clearly communicated months ago that the price of oil has not been a supply and demand issue at all. The price of oil, in my opinion, has been a victim of speculation for years now. Well, now you're starting to see all of these documentaries on CNBC and elsewhere verifying my suspicion. Oil has been nothing but a large opportunity for major Wall Street Financial Firms to make money by controlling the commodities market for oil. Pretty sad if you ask me since there are millions of Americans who continue to struggle financially and can't even take the family on a road trip vacation because they simply can't afford the price of gasoline. I'm going to provide a best and worst case scenario for oil here. Personally, I don't even like my own answer from a consumer's perspective but if we can peg oil, there's plenty of money to be made that could make up for what we're paying at the pumps. I've included a monthly chart of the price of light sweet crude here. As you can see, the price of oil is gunning for that $114 per barrel high put in back in April and May of last year. Hmmm.... What month are we in now? What's next month? I'm fairly certain that by the end of May, we'll likely achieve that $114 level which will equate to higher gasoline prices yet again. However, it does appear that oil could inevitably end up being range bound between roughly $74 per barrel and $114. That would be best case scenario and to boot, if oil becomes range bound, we're likely going to see speculators start bailing on playing the oil trade which could end up leaving oil pricing itself at its fair value. That would be awesome. Worst case scenario is oil breaks that $114 level to the upside with convincing price action and volume... and then starts gunning for that 2008 high of almost $150 per barrel. That would be a disaster and there would likely be a lot of very unhappy Americans, since we are the largest consumers of oil in the World. Get your bikes out. You Can Thank Tech for the Three Year Rally It's no surprise to me and should be no surprise to you (if you've been reading our newsletter) that Tech has been the strength of this rally all along. Tech, quarter after quarter, has continued to blow out earnings estimates and top line growth. It's the strength of the American economy. It is and likely will continue to be the foundation for our economy. Why? There's a lot of speculation out there that the Obama administration is very quietly and effectively doing its best to create class warfare which in its simplest form makes the rich richer and the poor poorer, regardless of what he's telling you. This would bode well for large tech companies. Now let's assume for a second, none of that speculation is true and the average folk is getting more opportunity as a result of our fearless leader's ways. That bodes well for tech as tech will likely be among the biggest job creators in the years ahead. The truth is, our economy and personality as a Country has moved from relying on good old-fashioned elbow grease and individual productivity, to relying on technical ingenuity and intelligence. Look around the globe... there are many more countries out there now getting more productivity out of a single individual than us. However, this Country still remains the leader of intellectual property. I know I'm ranting but it's important for you to know that tech is the strength of the market and deservingly so. I've included a weekly chart of the NDX, which represents the largest and most successful 100 Companies on the NASDAQ. Yes, we have been calling for this market to move lower and take a breather ever since it started to do so a few weeks ago. However, when you have a look at a weekly chart of the NDX here, you'll see we're still in a very bullish environment for the longer-term. There's nothing technically that tells us that the bears are going to take control of this market over the long-term. As a matter of fact, once this market finishes consolidating, there's a very good chance the NDX is going to make new highs. Too soon to tell though. A break above 2760 on the NDX would sure bode well for the bulls to come back in and take control. The bottom line here is if you're willing to read all of the tea leaves and not just one of your favorites in particular, you can really start to formulate some very strong opinions, or at the very least, be looking at the right things so you have an idea of what could be coming. That's why we have headlights on our car at night, right? So we can see what's coming. If gold implodes and oil goes range bound, watch out. This market could rally to levels you haven't seen in a long time. If gold doesn't implode and oil surpasses that $114 level convincingly, you might as well build a bomb shelter. This is why we love the markets...