Stock Market Selloff Coming Soon

A look at stock and gold markets shows a sharp selloff is around the corner.
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Yesterday was a relatively slow day in the market, as Fridays tend to be. I most likely sound like a broken record saying that gold and major stock market indices like the

S&P 500

are set for a selloff, but I want make the point again, to make sure everybody's prepared for the coming stock market selloff.

In short, major stock market indices and precious metals are way overbought and ready for a selloff, which most likely will be sharp. A 3%-5% correction is just around the corner. Both the broad stock market and precious metals are about to have their cycles turn, align and top out. That means a wave of selling is likely to hit the stock and precious metals markets.

Adding more fuel to the selloff will be the start of earnings season, and it doesn't matter whether the earnings news is good or bad. Everyone thinks stocks are doing well, which is why they have rallied strongly over the past two months. So if earnings are good, the reaction will be to "sell the news." If earnings are bad, investors will sell out of disappointment.

Unfortunately we did not catch the recent rally. The market was giving off a very mixed signal at the time of the reversal, and I wanted to wait for a pullback after the breakout, which has yet to happen. I do think it's just around the corner, though.

It is important to realize that trading is not about catching every move the market is flashing in front of you. Instead it's about knowing what you are looking for (trade setups and risk levels) and having the discipline to follow a technically proven strategy and system which will build wealth over time. There will always be another opportunity just around the corner.

I have a made a short video for members of my new service

FuturesTradingSignals.com

that explains what the

stock market

should do in the next few days.

If you are interested in receiving my Day Trading & Swing Signals and becoming a part of a close community of like-minded traders, please check out my service

FuturesTradingSignals.com

.

Chris Vermeulen is founder of the popular trading sites www.thegoldandoilguy.com and www.ActiveTradingPartners.com. There he shares his highly successful, low-risk trading method. Since 2001, Chris has been a leader in teaching others to skillfully trade in gold, silver, oil and stocks in both bull and bear markets.