MARKETS UPDATE (11:30 pm EDT)
Last week on Tuesday I wrote on the broad stock market:
"If we stick with the idea of new cycles starting on Jan. 13, a significant sub-cycle low is now due, and last week's lows are a good candidate - especially since they happened near the center of a strong reversal zone (March 3 - 18). A three to eight day rally could follow before this market turns down again, or we could get a longer rally (1-3 weeks) before the market turns back down. Tomorrow's FOMC meeting may have an influence on how this plays out. I am being very cautious now with my trading strategy. I may try and sell short the top of any significant rally that doesn't exceed the highs from Jan./Feb. If this top is missed, however, we may have to wait several more weeks for another short-selling opportunity."
All of this still applies. Last week's FOMC meeting seemed to cause a pause in equity markets, but all three market indices (DOW, S&P 500, NASDAQ) surged up early this week. They are now rounding over and falling again. There are no reversal zones this week, so it seems unlikely (but not impossible) that a significant top is forming now. This market is giving mixed short-term signals at the moment. All three indices are falling and approaching their 15-day moving averages, so this may act as support for another rally up. I am staying on the sidelines of this market for now.
After taking a short dip last week, gold and silver prices are rallying strongly this week with both metals making new weekly highs (and gold making new all-time highs above $3000). Last week's sharp 3-day drop in silver may have been significant, but gold's shallow 1-day drop was not. I am still waiting for both metals to make a more serious correction before buying. I am still on the sidelines of the precious metals.
After forming a strong baseline around $66 (April contract chart) for two weeks, crude oil prices have taken off and broken above both the 15-day and 45-day moving averages. We can expect some resistance around $70 and then $72. We enter a new reversal zone specifically for crude next week on Monday (March 31 - April 8), so crude may make s significant sub-cycle top in that time frame.
Crude is in a new medium-term cycle that began with the low of $64.85 early this month (March 5), and that low was also most likely the start of a longer-term (2 year) cycle. So far, this cycle looks bullish. I will therefore keep holding my long position in crude until the trend looks otherwise. As mentioned above, crude may be approaching a sub-cycle top and getting ready to take its first cycle correction. If this new cycle is indeed bullish, I plan on riding out any modest correction and staying long for at least several more weeks.
Last week on Tuesday I wrote on the broad stock market:
"If we stick with the idea of new cycles starting on Jan. 13, a significant sub-cycle low is now due, and last week's lows are a good candidate - especially since they happened near the center of a strong reversal zone (March 3 - 18). A three to eight day rally could follow before this market turns down again, or we could get a longer rally (1-3 weeks) before the market turns back down. Tomorrow's FOMC meeting may have an influence on how this plays out. I am being very cautious now with my trading strategy. I may try and sell short the top of any significant rally that doesn't exceed the highs from Jan./Feb. If this top is missed, however, we may have to wait several more weeks for another short-selling opportunity."
All of this still applies. Last week's FOMC meeting seemed to cause a pause in equity markets, but all three market indices (DOW, S&P 500, NASDAQ) surged up early this week. They are now rounding over and falling again. There are no reversal zones this week, so it seems unlikely (but not impossible) that a significant top is forming now. This market is giving mixed short-term signals at the moment. All three indices are falling and approaching their 15-day moving averages, so this may act as support for another rally up. I am staying on the sidelines of this market for now.
After taking a short dip last week, gold and silver prices are rallying strongly this week with both metals making new weekly highs (and gold making new all-time highs above $3000). Last week's sharp 3-day drop in silver may have been significant, but gold's shallow 1-day drop was not. I am still waiting for both metals to make a more serious correction before buying. I am still on the sidelines of the precious metals.
After forming a strong baseline around $66 (April contract chart) for two weeks, crude oil prices have taken off and broken above both the 15-day and 45-day moving averages. We can expect some resistance around $70 and then $72. We enter a new reversal zone specifically for crude next week on Monday (March 31 - April 8), so crude may make s significant sub-cycle top in that time frame.
Crude is in a new medium-term cycle that began with the low of $64.85 early this month (March 5), and that low was also most likely the start of a longer-term (2 year) cycle. So far, this cycle looks bullish. I will therefore keep holding my long position in crude until the trend looks otherwise. As mentioned above, crude may be approaching a sub-cycle top and getting ready to take its first cycle correction. If this new cycle is indeed bullish, I plan on riding out any modest correction and staying long for at least several more weeks.
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