In Monday's blog on crude oil I wrote:
"...the best fit for the cycle would be to see a final bottom in the next reversal zone specifically for crude, and that would be anytime between June 7 and June 24. An ideal target price range for a bottom now would be around $52 - $56. If we see support this week around $57 then we might get an early bottom, but ideally we would like to see a lower price into that June reversal period."
Prices had been holding above $58, but today they plummeted to $56.33. We are getting close to our target range, and that June reversal period starts on Friday of next week. Let's see if prices can go lower by then. Still on the sidelines of crude oil and waiting to buy.
Also in Monday's blog on precious metals I wrote:
"If gold and silver did start new cycles recently then gold could quickly rise to break its recent high of $1304 and silver could break above $15.64 by the first week of June. If that doesn't happen, we could easily see these metals making new lows into the middle of June."
Well, both metals had been falling this week, but today both gold and silver are rallying strongly. Prices still have time to break those highs (next week is the first week of June), but they could also fall lower into that next reversal zone for precious metals (June 12 - 20) to form a significant cycle bottom to buy. (That is our preferred scenario.) Things could go either way so we remain on the sidelines for now.
The U.S. Dollar Index made a significant bottom at 97.02 on May 13 right in the middle of a reversal zone specifically for currencies (May 7 - 16). The rally from there has been strong, but it is now encountering a strong resistance line around 98.20. If this resistance holds and turns the dollar back down, it could kick start a rally in the precious metals. But if the greenback "breaks out" above this resistance then we could see gold and silver prices push lower. We will watch this situation carefully.