The broad stock market continues its roller coaster ride up and down with a huge nearly 700 point surge in the DOW today (at the time of this writing) following yesterday's 660 point drop. A better than expected jobs report for December and some dovish comments from Federal Reserve Chairman Jerome Powell seems to be responsible for today's rally.
These jittery vacillations in equity markets are not making it easy for us to call a directional trade (which is why we are still on the sidelines), but we should be seeing a top to sell short or bottom to buy soon. We're now in the center of our first reversal zone in January (Jan. 1 - 9), but this one overlaps with a stronger one next week (Jan. 9 -17). If this market can continue a rally into next week (especially past Wednesday) and we see the DOW get to 24,500 or above (but not above 26,277) then we may have an ideal spot to sell short. On the other hand, if the market falls next week back to or below last week's low (21,712) then we will likely want to buy. Stay tuned for trade alerts.
It looks like we may be finally getting the top and reversal down in gold and silver prices that we have been waiting for, and it is happening in the center of our current reversal zone (Jan. 4). This looks like the first significant sub-cycle correction in new medium-term cycles for both metals that began in mid-November. We will now watch for the bottom of this sub-cycle "dip" to buy as these new cycles could now be quite bullish. A good time for that bottom would be the next reversal zone specifically for gold and silver coming up next week (Jan. 9 - 17, same as for the broad stock market). We will watch for it. On the sidelines for now.
Crude oil may have made its final medium-term and longer-term (3 year) bottom on Dec. 24 at $42.36 (Feb. contract chart), but it hasn't rallied that much from there which has me suspecting it could fall lower. We are coming up to a major reversal zone specifically for crude Jan. 14 - 25. It would be a much better fit for the medium-term and longer-term cycles to bottom in that time frame. We are looking to buy the bottom of these cycles, but let's wait a bit longer and see if prices can push lower into that reversal zone. Still on the sidelines of crude oil..