MARKETS UPDATE (11:30 pm EST)
As we move into the end of this week (and the center of a new relatively weak reversal zone - Feb. 17-24), it looks like the broad stock market might be rounding over to form a top. The DOW and NASDAQ made highs on Tuesday, and the S&P 500 made a new high yesterday. These are all new all-time highs, so again, we are not getting intermarket bearish divergence between these indices this week - something we like to see at an important cycle crest. Let's see if one or two (but not all three) of these indices can push higher into the first half of next week and give us that bearish divergence signal. Ten days ago (Feb. 8) I wrote:
"The big question here is whether or not the DOW and/or S&P 500 have already started new medium-term cycles from their Jan. 29 lows. If they have, they would be bullish and a significant reversal would not be imminent for at least several more weeks. It still looks like the NASDAQ is an older cycle which means that a top and significant downturn IS imminent (or should be)."
If the DOW and S&P 500 are newer cycles, they could make new highs next week, while the NASDAQ's high may not (it could have happened on Tuesday). This could give us our bearish divergence signal (and a possible opportunity to sell short) if it happens next week. Let's remain on the sidelines of the broad stock market for now.
On Feb. 7 my blog on the precious metals stated:
"....our cycle labeling [is] very ambiguous at the moment in both gold and silver charts. Regardless of the cycle patterns, a key level to watch now in gold is $1767. A break below there could give us a possible buy spot. Silver is also very tricky to call right now. Despite last week's dramatic rally, this metal could still be bearish and about to fall to new lows in the $22 - $24 area which could also be a potential spot to buy."
The cycles are still a bit unclear, but gold has now broken below that $1767 line which means a medium-term cycle bottom could be imminent. We are also in a reversal zone specifically relevant to the precious metals (Feb. 16 - 25). Silver has been more bullish than gold and has not (yet) fallen to our target range of $22 - $24. This suggests its cycle is relatively new, and it may only be making a sub-cycle bottom now. Let's stay on the sidelines of both metals for now and see if gold and/or silver prices want to go lower.
My Feb. 7 blog on crude oil stated:
"...it is likely late in the current medium-term cycle in crude, and a final top in this cycle should be imminent. If it doesn't top early this week, it may push higher into the last two weeks of this month."
Prices are indeed pushing higher this week. Today crude prices got to $62.26 (March contract chart). As with the broad stock market, we can't rule out higher prices into the first half of next week. Let's stay on the sidelines for now.
As we move into the end of this week (and the center of a new relatively weak reversal zone - Feb. 17-24), it looks like the broad stock market might be rounding over to form a top. The DOW and NASDAQ made highs on Tuesday, and the S&P 500 made a new high yesterday. These are all new all-time highs, so again, we are not getting intermarket bearish divergence between these indices this week - something we like to see at an important cycle crest. Let's see if one or two (but not all three) of these indices can push higher into the first half of next week and give us that bearish divergence signal. Ten days ago (Feb. 8) I wrote:
"The big question here is whether or not the DOW and/or S&P 500 have already started new medium-term cycles from their Jan. 29 lows. If they have, they would be bullish and a significant reversal would not be imminent for at least several more weeks. It still looks like the NASDAQ is an older cycle which means that a top and significant downturn IS imminent (or should be)."
If the DOW and S&P 500 are newer cycles, they could make new highs next week, while the NASDAQ's high may not (it could have happened on Tuesday). This could give us our bearish divergence signal (and a possible opportunity to sell short) if it happens next week. Let's remain on the sidelines of the broad stock market for now.
On Feb. 7 my blog on the precious metals stated:
"....our cycle labeling [is] very ambiguous at the moment in both gold and silver charts. Regardless of the cycle patterns, a key level to watch now in gold is $1767. A break below there could give us a possible buy spot. Silver is also very tricky to call right now. Despite last week's dramatic rally, this metal could still be bearish and about to fall to new lows in the $22 - $24 area which could also be a potential spot to buy."
The cycles are still a bit unclear, but gold has now broken below that $1767 line which means a medium-term cycle bottom could be imminent. We are also in a reversal zone specifically relevant to the precious metals (Feb. 16 - 25). Silver has been more bullish than gold and has not (yet) fallen to our target range of $22 - $24. This suggests its cycle is relatively new, and it may only be making a sub-cycle bottom now. Let's stay on the sidelines of both metals for now and see if gold and/or silver prices want to go lower.
My Feb. 7 blog on crude oil stated:
"...it is likely late in the current medium-term cycle in crude, and a final top in this cycle should be imminent. If it doesn't top early this week, it may push higher into the last two weeks of this month."
Prices are indeed pushing higher this week. Today crude prices got to $62.26 (March contract chart). As with the broad stock market, we can't rule out higher prices into the first half of next week. Let's stay on the sidelines for now.
RSS Feed