We still have no clear directional pattern in the broad stock market even as we arrive at the center of the current strong reversal zone (April 9 - 17). We do have some bearish divergence as the DOW hasn't yet made a new weekly high while the S&P 500 and NASDAQ have, but today's strong DOW rally is bringing it close to negating that bearish signal. Also, the DOW and S&P 500 are staying above those strong support levels I mentioned in Tuesday's blog which is arguing against a strong downturn now. Indeed, the DOW tested its support at 26,128 yesterday and is now rallying strongly off it. Let's wait and see how the market moves into the first half of next week. New highs then (esp. with another bearish divergence signal) may still give us an opportunity to sell short. Still on the sidelines here.
Gold and silver prices plummeted strongly yesterday and may now be bottoming in the center of this current reversal zone. Gold did not make a new low but silver touched its $14.90 low from March 5 to make a possible double bottom. We may be at a good point to buy both metals. I will discuss this more on Sunday as we may enter a long postion then before the market opens on Monday. Stay tuned. On the sidelines of both metals for now.
Crude oil is a little tricky to call right now. Prices rose to a new high on Monday ($64.77 - May contract chart) then fell a bit, but that was one day before the current reversal zone (April 9 - 17), and the price is rising today and challenging Monday's high. It is obviously better to get a high (and top) in the reversal zone so I am going to wait and see if prices can exceed $64.77 today or early next week. A sub-cycle correction is (was) due this week so crude's cycle pattern is distorting a bit here. Nevertheless, if we get a new high by next Wednesday, it may be a good place to sell short. The broad stock market's bullish energy right now is likely a factor driving crude prices higher. Let's stay on the sidelines for now. Longer term, we are still looking to go long at the bottom of any correction as this market still looks bullish through the rest of this year.