I am traveling today and will only have time for a brief update here. I will post another blog over the week-end with possible trade suggestions for the opening markets on Monday. (I usually don't like to trade on Fridays anyway unless there is a very clear buy or sell signal).
This week's rally in the broad stock market was a bit of a roller coaster ride, but all three indices (DOW, S&P 500, and NASDAQ) managed to break above their highs from last week so we have no intermarket bearish divergence signal. The DOW and S&P 500 are also a bit short of our targets for this rally (25,000 and 2,700, respectively). Even though we are ending a strong reversal zone today, there is another one coming up next week (mid-point Aug. 18) and the two are overlapping a bit. We are ripe for a top here to be followed by a significant correction depending on where we are in the cycle structure. I will examine this in more detail over the week-end. We may enter a short position on Sunday (for Monday's market open) or I may decide to wait for a possible bearish divergence signal early next week before going short. On the sidelines for now.
Gold and silver prices spiked dramatically on Wednesday (the middle of a reversal zone), but then (as I had suspected they would) prices reversed and plunged back down. We could be getting a set-up now for a strong potential rally from yesterday's lows or from a lower low we could see on Monday. We are already long in gold and will consider going long in silver on Sunday or Monday. Stay tuned for a trade alert.