Some bearish signals are appearing today in the broad stock market (especially the NASDAQ) and these may be the first signs of the correction we've been expecting. The depth and extent of this correction will likely tell us if this market is going to be bullish or bearish going forward, at least short-term. As stated in earlier blogs, we are being cautious in our short-selling of the broad stock market (momentum is still generally bullish and we don't want to underestimate the ability of the Federal Reserve and others to keep this market propped up), so our strategy- at least for now- is to be bullish, and we will look to buy somewhere above 14,000 in the DOW. A clear break below 14,000, however, would negate this bullish stance. Still out of this market.
The precious metals were up strongly today which is good news for our gold long positions (we sold our silver longs yesterday). It is too early to tell if our bailout of silver was premature as there is still the possiblity of a breakdown here, but we will probably know by the end of next week which direction this market is taking. A break above $28 in silver prices would probably give us the confidence to buy back our long positions. Still holding our long gold positions and standing aside silver.
Our profit taking and selling of our long crude oil positions on Tuesday turned out to be excellent timing as the price of crude has dropped steeply over the last three days. As with the stock market, we are watching for a bottom to this correction and will look to buy as long as momentum indicators remain bullish. On the sidelines for now.
The Swiss Franc is up strongly today and technical signals are showing more bullishness which gives a nice thumbs up to our entry point yesterday. The bullishness of the Swiss Franc (and bearishness of the U.S.Dollar) today is also a good sign for the precious metals as a downturn in the dollar usually stimulates a rally in gold and silver. We are now long in the Swiss Franc.