BRIEF MARKETS UPDATE (7:00 pm EST)
The DOW and S&P 500 were bullish today and both made record highs seemingly inspired by preliminary talk about the confirmation hearings for Janet Yellen's Federal Reserve chairwoman nomination scheduled for tomorrow. Ms Yellen is generally thought to favor the Fed's bond-buying economic stimulus policy (QE), and her nomination is fueling optimism in the markets. Despite these highs, the broad stock market is overbought and looking rather toppy, and we are still in a time window for a significant reversal (it could extend into Friday). If the market is going to turn down it has to start doing this by the end of the week or we will have to assume the buoyant stock market (fueled by dreams of endless QE) has averted another correction. Momentum continues to be strongly bullish so we are looking for an ideal entry point to go long. On the sidelines for now.
Unlike the broad stock market, crude oil is falling this week. Crude may have made a top on Monday at $95.38, but it is still possible for it to climb higher before we leave the reversal zone for this market (which ends next Monday). Momentum remains very bearish in crude oil and we are looking for a point to sell short. Still on the sidelines here.
Gold and silver are still testing their support zones with silver very close to that $20.50 level we do not want to see breached. There is still time for a reversal in precious metals here, but it has to be soon (by Friday) to avert the risk of a further drop in prices. The U.S. Dollar Index fell strongly today so this may act as a bullish stimulus to kick the price of gold and silver up. Still holding our long positions in gold and silver.
The DOW and S&P 500 were bullish today and both made record highs seemingly inspired by preliminary talk about the confirmation hearings for Janet Yellen's Federal Reserve chairwoman nomination scheduled for tomorrow. Ms Yellen is generally thought to favor the Fed's bond-buying economic stimulus policy (QE), and her nomination is fueling optimism in the markets. Despite these highs, the broad stock market is overbought and looking rather toppy, and we are still in a time window for a significant reversal (it could extend into Friday). If the market is going to turn down it has to start doing this by the end of the week or we will have to assume the buoyant stock market (fueled by dreams of endless QE) has averted another correction. Momentum continues to be strongly bullish so we are looking for an ideal entry point to go long. On the sidelines for now.
Unlike the broad stock market, crude oil is falling this week. Crude may have made a top on Monday at $95.38, but it is still possible for it to climb higher before we leave the reversal zone for this market (which ends next Monday). Momentum remains very bearish in crude oil and we are looking for a point to sell short. Still on the sidelines here.
Gold and silver are still testing their support zones with silver very close to that $20.50 level we do not want to see breached. There is still time for a reversal in precious metals here, but it has to be soon (by Friday) to avert the risk of a further drop in prices. The U.S. Dollar Index fell strongly today so this may act as a bullish stimulus to kick the price of gold and silver up. Still holding our long positions in gold and silver.
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