Today the S&P 500 and NASDAQ both made new weekly (and all-time highs), but the DOW did not (but came very close). This intermarket bearish divergence could mean that equities will fall now, unless the DOW makes a new high tomorrow (very possible). We will continue to watch for a modest correction to buy. That may come now, but if these indices push higher into late this week, we may see the rally continue into our next reversal zone (Nov. 20 - 28) before any significant correction. Good targets now for a correction would be around 27,250 in the DOW and 3,040 in the S&P 500). Still on the sidelines of the broad stock market.
In last Thursday's blog on gold and silver I wrote:
"It appears there is a good chance gold and silver could break below their Oct. 1 lows ($1456 and $16.93, respectively) or at least form double bottoms to those lows. I am hesitant to buy here as the trend of this market may be turning bearish."
It looks like this is happening. Gold has broken, but not yet closed below $1456. Silver, however, is closing below $16.93. It's likely prices will move lower now. The cycle labeling of both metals is now in question with several different possibilities. Other technical signals are suggesting a significant low by next Wednesday to be followed by a strong rally. Gold prices could get down to the $1400 area for this low, and silver as low as $15.50. These could be good buy spots if prices get there. Let's stay on the sidelines of the precious metals for now.
It looks like last week's high in crude oil at $57.88 (Dec. contract chart) could have been a sub-cycle top (it happened in our reversal zone specifically for crude). If so, prices are now falling to the first sub-cycle correction in the current medium-term cycle. A good target for that corrective dip would be $54 - $55. If instead prices push higher into the end of this week, it would mean the sub-cycle top is still forming. Either way, we will wait for a sub-cycle correction to buy. If that correction goes significantly below $54 (and especially below $50.89), however, then we will abandon our plans to buy as the market would be turning bearish. Still on the sidelines of crude oil.