MARKETS UPDATE (3:30 pm EST)
The broad stock market continues its buoyancy as we come to the end of the current strong reversal zone for equities (it ends Monday). The DOW edged up to a new monthly high today, but (at the time of this writing) the S&P 500 and NASDAQ are still below last week's highs so we have a case of intermarket bearish divergence. It looks like this reversal zone is going to correlate with a high (unless we see a bullish "breakout" next week which occasionally happens in a reversal zone). We still have not exceeded our stop loss points for our short position (25,100 in the DOW and 2,700 in the S&P 500) so I am remaining short for now.
Gold and silver prices shot up today in response to a sharp drop in the U.S. Dollar Index. We may have a case of bearish divergence in this market too as gold made a new monthly high today and silver did not. Neither gold nor silver has corrected down to our ideal target price ($1245 in gold and $14.50 in silver). Is today's rally signaling that the short-term correction is over without reaching our targets? It's possible, but if this bearish divergence holds into next week, prices could retreat back down again. Despite today's drop in the dollar, the cycle picture for the greenback looks quite bullish right now so we could see it recover and continue its rally next week which could bring the price of gold and silver back down. On the sidelines of gold and silver and still waiting for a spot to buy.
Crude oil prices have been relatively flat this week. Crude did make a new high on Tuesday at $54.51 (March contract chart) which was near the center of the current reversal zone in crude that ends today. This is suggesting that prices could move lower now from that top (especially since the next major reversal zone for crude is in early March). Let's wait and see if prices can back down into the $48 - $50 range where we will consider going long. A break below $44 might change this bullish view. Still on the sidelines of crude oil.
The broad stock market continues its buoyancy as we come to the end of the current strong reversal zone for equities (it ends Monday). The DOW edged up to a new monthly high today, but (at the time of this writing) the S&P 500 and NASDAQ are still below last week's highs so we have a case of intermarket bearish divergence. It looks like this reversal zone is going to correlate with a high (unless we see a bullish "breakout" next week which occasionally happens in a reversal zone). We still have not exceeded our stop loss points for our short position (25,100 in the DOW and 2,700 in the S&P 500) so I am remaining short for now.
Gold and silver prices shot up today in response to a sharp drop in the U.S. Dollar Index. We may have a case of bearish divergence in this market too as gold made a new monthly high today and silver did not. Neither gold nor silver has corrected down to our ideal target price ($1245 in gold and $14.50 in silver). Is today's rally signaling that the short-term correction is over without reaching our targets? It's possible, but if this bearish divergence holds into next week, prices could retreat back down again. Despite today's drop in the dollar, the cycle picture for the greenback looks quite bullish right now so we could see it recover and continue its rally next week which could bring the price of gold and silver back down. On the sidelines of gold and silver and still waiting for a spot to buy.
Crude oil prices have been relatively flat this week. Crude did make a new high on Tuesday at $54.51 (March contract chart) which was near the center of the current reversal zone in crude that ends today. This is suggesting that prices could move lower now from that top (especially since the next major reversal zone for crude is in early March). Let's wait and see if prices can back down into the $48 - $50 range where we will consider going long. A break below $44 might change this bullish view. Still on the sidelines of crude oil.
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