MARKETS UPDATE (2:00 pm EST)
After a small relief rally yesterday, it looks like the broad stock market is resuming its corrective fall as the DOW and S&P 500 approach the upper levels of our target ranges for a final medium-term cycle bottom (that would be 30,500 - 32,500 in the DOW and 3,600 - 3,900 in the S&P 500). This is good news for our current short position in this market. Our next strong reversal zone is coming up March 14 - 23. It's very possible for equities to continue their correction down into that time frame (i.e. for another two weeks) before reaching a final medium-term cycle bottom inside the ranges stated above. With this in mind, let's plan on holding our short position until we see some signs of a bottom forming in our target ranges, which may not happen for at least two more weeks. We are holding our short position in the broad stock market for now.
Precious metal prices continue to fall, and today both gold and silver are making new weekly lows. This negates any intermarket bullish divergence signal for this week. As stated in previous blogs, we are now waiting to buy the final bottoms in the current medium-term cycles of both metals. Gold's final bottom is due anytime now over the next 5 weeks in the price range of $1770 - $1810. Prices have just penetrated the upper part of that range today. Silver's final bottom is actually overdue which means its cycle is expanding (distorting), and silver is now moving into the lower end of its target price range ($20 - $22) for a bottom. Despite the lack of a bullish divergence signal, a bottom could be forming now as this week is a potential "pivot point" for both gold and silver. But there is a much stronger potential pivot point for both metals coming up the week of March 6 - 10, and there is a very strong reversal zone specifically for the precious metals coming up March 13 - 21. It would be ideal to see the final cycle bottoms in one of these time frames, so until we see stronger signs that a bottom is forming, I am going to hold off buying. Let's stay on the sidelines of both metals for now.
After falling for most of this week, crude oil prices seem to have found support at $74 (April contract chart) and are rising a bit today. The cycle (new or old) and short-term trend (bullish or bearish) in this market is still not clear. Prices seem to be in congestion between $74 and $80, so we will stay on the sidelines of crude until prices can break under or over this range. A clear break below $70.86 would be (short-term) bearish, and a clear break above $82.89 would be very bullish.
After a small relief rally yesterday, it looks like the broad stock market is resuming its corrective fall as the DOW and S&P 500 approach the upper levels of our target ranges for a final medium-term cycle bottom (that would be 30,500 - 32,500 in the DOW and 3,600 - 3,900 in the S&P 500). This is good news for our current short position in this market. Our next strong reversal zone is coming up March 14 - 23. It's very possible for equities to continue their correction down into that time frame (i.e. for another two weeks) before reaching a final medium-term cycle bottom inside the ranges stated above. With this in mind, let's plan on holding our short position until we see some signs of a bottom forming in our target ranges, which may not happen for at least two more weeks. We are holding our short position in the broad stock market for now.
Precious metal prices continue to fall, and today both gold and silver are making new weekly lows. This negates any intermarket bullish divergence signal for this week. As stated in previous blogs, we are now waiting to buy the final bottoms in the current medium-term cycles of both metals. Gold's final bottom is due anytime now over the next 5 weeks in the price range of $1770 - $1810. Prices have just penetrated the upper part of that range today. Silver's final bottom is actually overdue which means its cycle is expanding (distorting), and silver is now moving into the lower end of its target price range ($20 - $22) for a bottom. Despite the lack of a bullish divergence signal, a bottom could be forming now as this week is a potential "pivot point" for both gold and silver. But there is a much stronger potential pivot point for both metals coming up the week of March 6 - 10, and there is a very strong reversal zone specifically for the precious metals coming up March 13 - 21. It would be ideal to see the final cycle bottoms in one of these time frames, so until we see stronger signs that a bottom is forming, I am going to hold off buying. Let's stay on the sidelines of both metals for now.
After falling for most of this week, crude oil prices seem to have found support at $74 (April contract chart) and are rising a bit today. The cycle (new or old) and short-term trend (bullish or bearish) in this market is still not clear. Prices seem to be in congestion between $74 and $80, so we will stay on the sidelines of crude until prices can break under or over this range. A clear break below $70.86 would be (short-term) bearish, and a clear break above $82.89 would be very bullish.
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