The July 31 Fed announcement is shaping up to be a pivotal event. I think it will either validate a breakout in US stocks or send prices sharply lower.

If stocks continue to rally after the Fed decision, then we will likely see an advancing uptrend and energy stocks and oil may begin to outperform.

If the Fed neglects to lower interest rates or this turns out to be a “buy the rumor and sell the news” situation, then stocks could drop sharply in August.

Gold is maintaining the breakout above $1365. Prices appear to be consolidating near $1400, and the odds favor more upside. If prices close above $1425 early next week, then I’ll expect an extension above $1450.

S&P 500 WEEKLY

Stocks are making new all-time highs before the much anticipated July 31 Fed announcement. A minimum 0.25% rate cut is expected. Progressive weekly closes above 3050 following the Fed decision would imply a breakout and invalidate the potential megaphone topping pattern. Stocks could drop sharply if this turns out to be a “buy the rumor sell the news” event or if the Fed neglects to cut rates in July.

DOW WEEKLY

The Dow closed above significant resistance at 27,000. On the surface, it looks like a breakout. Closing below 26,500 after the July 31 Fed announcement would infer a false breakout.

WTIC

If stock markets continue higher after the July Fed announcement, then I suspect oil will continue to climb, and battered energy stocks may begin to outperform.

GOLD

Gold has maintained the breakout about $1365. Prices appear to be consolidating, and I think the odds favor more upside. Firm closes below $1385 would recommend a retest of key support surrounding $1360.

SILVER

Prices have held support near $15.00. It would take closes above $15.30 and then $15.45 recommend another up leg. Slipping below $14.90 could trigger sharp selling.

GDX

If this is a bull flag breakout, then we should see significant upside follow-through early next week in GDX. Closing below $25.65 would be short-term negative and promote more consolidation or form a double top. It looks like prices want to head higher.

GDXJ

Gold Juniors GDXJ needs to close decisively above $36.00 to recommend an upside breakout and prevent a double top.