MARKETS UPDATE (11:30 pm EST)
Our main attention at the moment is focused on the precious metals markets due to the severe breakdown of gold and silver at the end of last week (which is continuing in the overnight market right now- Sunday night). If you've been following the blog over the last month or so you will know that we were expecting a strong rally in precious metals as long as the strong support levels at $1500-1530 in gold and $26-27 in silver were not clearly breached, and that breaking below these supports could lead to a serious decline. Unfortunately, the supports have broken down, and we now need to revise our trading strategies to accommodate this bearish reversal. We sensed this weakening in the market the week before last and sold our silver long positions on April 4 and then unloaded our long gold positions last Friday, so we are fully out of these markets now. Technical analysis shows little support for gold prices until the $1000 level is approached, and while this does not necessarily mean gold will drop that far, there is plenty of room here for a deep correction. Several sources that I consult for my analysis of the markets seem to feel it is likely this drop in the price of gold right now was engineered by various market manipulators to quickly devalue gold (for reasons to complicated to discuss here) by shaking out a lot of holders (like us) at a widely recognized stop loss level around $1500. I've briefly discussed the manipulation of the broad stock market a few times on the website and how it can interfere with the normal flow of market cycles and make our market timing more difficult. Though less frequently done, the manipulation of gold prices can also upset market timing strategies, but if we are nimble and flexible in our trading, we can take advantage of a strong change in direction. We will therefore be considering short selling gold on any short-term rallies should they occur now. (There is a possibility we could see a "whipsaw" type behavior in gold prices at this juncture, that is, a snapping back of the price above the $1500 level and a subsequent strong rally, but this is considered highly unlikely at the moment.) I will also repeat here what I said in the last blog that once this correction has finally bottomed, it will be a great buying opportunity in gold because it will likely mark the ending of a major long-term cycle and the beginning of a new one (very bullish). But for now, we are bearish.
The broad stock market continues to look quite bullish, but we are still waiting for some sort of correction (it may be small) to give us a better entry point into the market. There are currently some bearish indicators in the NASDAQ that suggest a fairly significant correction is imminent. Still on the sidelines here.
In last Wednesday's market update I stated that we were looking to go long again in crude oil as long as the overall picture of this market remained bullish. That situation has changed as the price of crude is now plunging below $89 and major bearish momentum signals have appeared in the crude oil charts over the last few days. As with gold, some signifcant support levels are being broken here, and we will have to wait and see what kind of pattern develops before we reenter this market. Out of this market for now.
Our main attention at the moment is focused on the precious metals markets due to the severe breakdown of gold and silver at the end of last week (which is continuing in the overnight market right now- Sunday night). If you've been following the blog over the last month or so you will know that we were expecting a strong rally in precious metals as long as the strong support levels at $1500-1530 in gold and $26-27 in silver were not clearly breached, and that breaking below these supports could lead to a serious decline. Unfortunately, the supports have broken down, and we now need to revise our trading strategies to accommodate this bearish reversal. We sensed this weakening in the market the week before last and sold our silver long positions on April 4 and then unloaded our long gold positions last Friday, so we are fully out of these markets now. Technical analysis shows little support for gold prices until the $1000 level is approached, and while this does not necessarily mean gold will drop that far, there is plenty of room here for a deep correction. Several sources that I consult for my analysis of the markets seem to feel it is likely this drop in the price of gold right now was engineered by various market manipulators to quickly devalue gold (for reasons to complicated to discuss here) by shaking out a lot of holders (like us) at a widely recognized stop loss level around $1500. I've briefly discussed the manipulation of the broad stock market a few times on the website and how it can interfere with the normal flow of market cycles and make our market timing more difficult. Though less frequently done, the manipulation of gold prices can also upset market timing strategies, but if we are nimble and flexible in our trading, we can take advantage of a strong change in direction. We will therefore be considering short selling gold on any short-term rallies should they occur now. (There is a possibility we could see a "whipsaw" type behavior in gold prices at this juncture, that is, a snapping back of the price above the $1500 level and a subsequent strong rally, but this is considered highly unlikely at the moment.) I will also repeat here what I said in the last blog that once this correction has finally bottomed, it will be a great buying opportunity in gold because it will likely mark the ending of a major long-term cycle and the beginning of a new one (very bullish). But for now, we are bearish.
The broad stock market continues to look quite bullish, but we are still waiting for some sort of correction (it may be small) to give us a better entry point into the market. There are currently some bearish indicators in the NASDAQ that suggest a fairly significant correction is imminent. Still on the sidelines here.
In last Wednesday's market update I stated that we were looking to go long again in crude oil as long as the overall picture of this market remained bullish. That situation has changed as the price of crude is now plunging below $89 and major bearish momentum signals have appeared in the crude oil charts over the last few days. As with gold, some signifcant support levels are being broken here, and we will have to wait and see what kind of pattern develops before we reenter this market. Out of this market for now.
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