After a brief corrective dip yesterday, it appears that the broad stock market is resuming its "holiday" rally which may continue into the end of the week (New Year's Day). My analysis from last week (Dec. 3) still applies. If this rally continues, we will want to watch for any breach of 17,900 - 18,000 in the DOW and 2100 -2120 in the S&P 500 which could mean the rally will persist into mid-January. On the other hand, an approach to those levels without breaking them by Friday might be a good signal to sell short. We will watch this situation carefully for any trading opportunity. Still on the sidelines.
Gold and especially silver prices dropped yesterday and are down a bit today but are still holding above their December lows. Ideally, the medium-term cycle bottoms for these two metals are already in with those lows and we will see more rallying into mid-January. If prices start to break below those lows, however, it is possible for us to see the cycle bottoms in mid-January. We will watch price movements carefully this week and next. The U.S. Dollar Index surged up today but then backed off from resistance in the 98.5 area. As I mentioned in last week's blog, the dollar has an enormous amount of resistance to overcome all the way up to 100. This is supporting our bullish view of the precious metals at the moment. Still holding my long position in gold and silver.