Four Pillars Finance Newsletter

Issue #110 (20 January 2011)Hello everybody.Today we take a look at the medium term perspectives for the markets we cover.Some interesting situations are arising.We have been mostly in one-way markets since last summer, but it is not going to stay like that.It would make life too easy.Here is the FPF prediction chart for the Nasdaq in 2011.

(Predictive chart made with FPF 1.1 software, available athttp://www.fourpillars.net/finance/fpf.php

)

Nasdaq

Current level: 2725

The Nasdaq is now very close to the price levels we pictured as an ideal selling area in our previous newsletter (Dec.13)As you can see in the FPF prediction chart for Nasdaq, a top is likely in January or early February, but then we will entermore dangerous waters.Metal months are coming up for February-March, which means increased odds for a market decline or at least some seriousconsolidation.Also May-June does not look too good in our cycles.So, take some profits, buy some protection for your portfolio, or just stay out...Possible downside targets: 2400, then 2100Here is our updated prediction chart for NasdaqAlso notice the massive divergence that my momentum indicator is currently showing.This usually signals a change of trend is about to start:

Gold

Current level for XAU index: 205

Gold stocks are down almost 10% since our last newsletter.We have been warning for weakness in this market (for which I got some angry letters), but really the gold stocks are doingrather poorly given that gold and silver prices are at or near record highs.The XAU index is now back to where it was in early 2008 (see chart)We are still in Earth months, typically a bottom period for gold stocks, so we stick to our downside target of 190 for thismarket. If we drop below that, then watch for 170, next 150. Here is the updated chart: