Despite the upcoming Fourth of July holiday in the U.S., the broad stock market has been falling this week, although it seems a bit hesitant in its movement down (perhaps buoyed by the anticipation of fireworks and barbecue festivities coming up this week-end). We are still in a reversal zone through next Wednesday (I may even extend that to next Friday because of the holiday interruption). If this market continues down past its lows from June 16-17, it will make the case of an older medium-term cycle moving to its final bottom. But if we get a bottom this week or next well above those lows, we will likely switch to the idea of a new, young cycle that would be at least short-term bullish. We note that after next week, the rest of the month of July has no significant reversal zones, so any trend (up or down) established now or next week will likely continue into early August. We are still on the sidelines of the broad stock market.
Gold and silver prices have also been falling this week, and this has been good for our short positions in both metals.
It is starting to look like these metals are falling into the final bottoms of older medium-term cycles. This is especially the case for silver, which has now broken below its $20.52 low from May 13. We are now at the dead center of a reversal zone specifically for these metals (June 27 -July 5) and they are both falling steeply. This means a reversal back up and at least a short-term rally could be imminent. I am going to cover (unload) my short positions in gold and silver now (i.e. set up trade for tomorrow's market open). Since we entered these short positions on June 6, we should have a decent profit, especially in silver (around 9%).
Crude oil prices got to $114 yesterday, but they have backed down sharply from there today. There is a resistance line in crude now around $115, so a pullback from there is to be expected. We entered a long position in crude last week around $104, and today's drop to $105 has erased most our gain. Nevertheless, there is some support between $104 - $105, so I am going to hold my long position for now and maintain my stop loss for this trade on a break below $102. If crude can overcome that resistance at $115, there's still a good chance we could see a strong rally that could go as high as $145.