Citi’s Fitzpatrick: STOCKS WILL DIVE AND GOLD WILL SURGE TO ALL-TIME HIGHS
May 17, 2012
In an interview with King World News, Tom Fitzpatrick, one of Citibank’s top technical analysts, said that the stock markets will continue to move lower in the coming weeks, possibly tumbling by as much as 28 percent. This will come as the volatility index, or VIX, spikes.
We’ve broken above that resistance level at 21% on the VIX, completing what is a very clear inverted head and shoulders within the daily chart. That suggests we could easily get a move that could take us up to something in the region of 27% to 28% (on the VIX).
The longer-term chart might even suggest a little bit more than that (27% to 28% target) on the VIX, but for the moment that is the interim target. So we are very closely focused on that and the fact that we’ve made a very significant break. By definition it suggest we’re going to continue to see a lower move in the equity markets in the weeks ahead.
He expects the S&P to move down to the 200 day moving average if the VIX is going to move to the 27-28% target that he has set. This is a reiteration of a call he made just a week ago.
Additionally, Fitzpatrick expects new-all time highs in gold.