MARKETS UPDATE (5:15 pm EST)
There are several political/economic events in the news right now that could have a major effect on financial markets this week, so I will mention them here along with the technical picture of the markets at the moment. A key event this week will be Ben Bernanke's press conference on Wednesday after the Federal Reserve's policy meeting, and the markets will likely remain calm until then.
The broad stock market is a little more bullish this week, today breaking above the 15,200 level that seemed to be holding it back last week; however overall directional momentum is mixed (bullish and bearish), so it is still not clear where this market is going short-term. Some analysts are speculating that Bernanke in his speech tomorrow will continue to hint (as he did several weeks ago) that the Fed is close to tapering down its massive quantitative easing program (QE). If so, this would certainly put more fear into the stock market. President Obama in a public television interview on Monday implied that this could be Mr. Bernanke's last term (which expires in January) as Fed chairman, and this may also exacerbate the fear of imminent changes in the Federal Reserve's monetary policy which could possibly be implemented by a new chairman. Because the market's current technical signals are mixed, we will wait to see how tomorrow's speech will affect directional sentiment. Still out of this market.
Gold and silver are both down today and momentum is still looking quite bearish short-term. Our stand aside attitude with this market is proving useful as these metals have been bouncing up and down in a relatively narrow range over the last several weeks, but tomorrow's Fed speech may give it a strong directional kick. We will wait to see if this is going to be up or down. Still on the sidelines here.
Last Friday crude oil broke out to a new multi-month high and its momentum shifted abruptly from strongly bearish to strongly bullish. The triggering event for this was most likely the escalating civil war in Syria. Today's news report that leaders at the G8 summit could not come to a decisive agreement on how to handle the Syrian crisis indicates that the tension of this situation is not winding down, and this could propel oil prices higher (above $100) quickly. There is the potential here for a good short-term rally, but I want to wait for the possibly high volatility of tomorrow's markets (due to Bernanke's speech) to pass before commiting to any trade. (Note: I am still expecting a substancial correction in crude oil within the next month or two that I will probably want to sell short, and the shorting point will likely be the peak of the current rally.) Out of this market for now.
There are several political/economic events in the news right now that could have a major effect on financial markets this week, so I will mention them here along with the technical picture of the markets at the moment. A key event this week will be Ben Bernanke's press conference on Wednesday after the Federal Reserve's policy meeting, and the markets will likely remain calm until then.
The broad stock market is a little more bullish this week, today breaking above the 15,200 level that seemed to be holding it back last week; however overall directional momentum is mixed (bullish and bearish), so it is still not clear where this market is going short-term. Some analysts are speculating that Bernanke in his speech tomorrow will continue to hint (as he did several weeks ago) that the Fed is close to tapering down its massive quantitative easing program (QE). If so, this would certainly put more fear into the stock market. President Obama in a public television interview on Monday implied that this could be Mr. Bernanke's last term (which expires in January) as Fed chairman, and this may also exacerbate the fear of imminent changes in the Federal Reserve's monetary policy which could possibly be implemented by a new chairman. Because the market's current technical signals are mixed, we will wait to see how tomorrow's speech will affect directional sentiment. Still out of this market.
Gold and silver are both down today and momentum is still looking quite bearish short-term. Our stand aside attitude with this market is proving useful as these metals have been bouncing up and down in a relatively narrow range over the last several weeks, but tomorrow's Fed speech may give it a strong directional kick. We will wait to see if this is going to be up or down. Still on the sidelines here.
Last Friday crude oil broke out to a new multi-month high and its momentum shifted abruptly from strongly bearish to strongly bullish. The triggering event for this was most likely the escalating civil war in Syria. Today's news report that leaders at the G8 summit could not come to a decisive agreement on how to handle the Syrian crisis indicates that the tension of this situation is not winding down, and this could propel oil prices higher (above $100) quickly. There is the potential here for a good short-term rally, but I want to wait for the possibly high volatility of tomorrow's markets (due to Bernanke's speech) to pass before commiting to any trade. (Note: I am still expecting a substancial correction in crude oil within the next month or two that I will probably want to sell short, and the shorting point will likely be the peak of the current rally.) Out of this market for now.
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