MARKETS UPDATE (10:30 pm EST)
The broad stock market was a bit of a roller coaster ride this week. The DOW was the most bearish, peaking with a new weekly high on Monday and then falling dramatically into Thursday, but then staging a strong bounce back up today. The S&P 500 and NASDAQ peaked with new weekly highs a little later towards the middle of the week but then also plunged on Thursday and rebounded strongly today (Friday). The DOW broke below both its 15-day and 45-day moving average and closed the week below both (bearish). The S&P 500 also breached its 15 and 45-day moving averages, but it closed the week back above both (bullish). The NASDAQ only breached its 45-day moving average and also closed the week above it (more bullish).
So we are getting mixed bullish and bearish signals here, and there's still a chance these indices could rise next week to challenge or exceed their Dec. 13 highs. If all three break and close above those highs, the current trend would be confirmed as bullish, and we would probably wait for a significant corrective dip to buy. But if only one or two (or none) of these indices break those highs by the end of next week, it would be a bearish sign, and we may look to go short. Let's remain on the sidelines of the broad stock market for now.
Gold and silver also gave us some mixed signals this week. Both metals fell sharply early this week, but both have recovered much of that loss yesterday and today. Gold, in fact, made a new weekly high today, but silver did not, so our intermarket bearish divergence signal persists. Gold's next sub-cycle corrective low is due in two weeks (by Feb. 3), so it still has time to make a new high before falling. (That is, If the high wasn't today. If it wasn't, it will likely happen next week.) Silver, on the other hand, has its final medium-term cycle bottom due by the end of next week. This means its top is most likely in, and despite today's bounce, prices should continue to fall next week into our $20 - $22 range (we hope). We will continue to hold our short position in silver and maybe lower our stop loss now to a break above this week's high of $24.50.
Crude oil prices also bounced around quite a bit this week. The peak high on Wednesday at $82.38 exceeded the Jan. 3 high of $81.50, but today's close at $81.31 was still below that high. The medium-term cycle labeling for crude is still unclear, and we can't be sure if the cycle trend is bullish or bearish. We will remain on the sidelines of crude for now.
The broad stock market was a bit of a roller coaster ride this week. The DOW was the most bearish, peaking with a new weekly high on Monday and then falling dramatically into Thursday, but then staging a strong bounce back up today. The S&P 500 and NASDAQ peaked with new weekly highs a little later towards the middle of the week but then also plunged on Thursday and rebounded strongly today (Friday). The DOW broke below both its 15-day and 45-day moving average and closed the week below both (bearish). The S&P 500 also breached its 15 and 45-day moving averages, but it closed the week back above both (bullish). The NASDAQ only breached its 45-day moving average and also closed the week above it (more bullish).
So we are getting mixed bullish and bearish signals here, and there's still a chance these indices could rise next week to challenge or exceed their Dec. 13 highs. If all three break and close above those highs, the current trend would be confirmed as bullish, and we would probably wait for a significant corrective dip to buy. But if only one or two (or none) of these indices break those highs by the end of next week, it would be a bearish sign, and we may look to go short. Let's remain on the sidelines of the broad stock market for now.
Gold and silver also gave us some mixed signals this week. Both metals fell sharply early this week, but both have recovered much of that loss yesterday and today. Gold, in fact, made a new weekly high today, but silver did not, so our intermarket bearish divergence signal persists. Gold's next sub-cycle corrective low is due in two weeks (by Feb. 3), so it still has time to make a new high before falling. (That is, If the high wasn't today. If it wasn't, it will likely happen next week.) Silver, on the other hand, has its final medium-term cycle bottom due by the end of next week. This means its top is most likely in, and despite today's bounce, prices should continue to fall next week into our $20 - $22 range (we hope). We will continue to hold our short position in silver and maybe lower our stop loss now to a break above this week's high of $24.50.
Crude oil prices also bounced around quite a bit this week. The peak high on Wednesday at $82.38 exceeded the Jan. 3 high of $81.50, but today's close at $81.31 was still below that high. The medium-term cycle labeling for crude is still unclear, and we can't be sure if the cycle trend is bullish or bearish. We will remain on the sidelines of crude for now.
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