I haven't posted any blogs since Monday as markets have been very stable and have shown little change throughout the week. As I've stated before, I don't like to fill the blog with financial news chitchat unless it is directly relevant to our trading decisions. Please note that I analyze these markets very carefully every day whether or not a blog is posted. There are no changes to our current positions today.
The broad stock market continues to look quite bullish with most momentum indicators still pointing up; however, the DOW chart is looking a lttle toppy at the moment and appears to be leveling off (which may indicate the start of some sort of correction). Considering its recent bullishness, blog readers may wonder why we don't have long positions in the broad stock market right now, and my answer is that the mid-term and long-term picture of the broad stock market is really not very good at all, and so any rallies, even strong ones, are likely to be short-term, and we should be cautious about entering them. Our recently entered long position in crude oil (which has made good gains) was thought to be a better allocation of our resources than the broad stock market because crude appeared to be starting a new rally while the broad stock market's rally had already made significant gains. (I will comment more on the current condition of crude oil and the broad stock market in a blog later in the weekend).
I know many traders holding long positions in precious metals right now are probably getting a little impatient and wondering when or if their investment is going to "take off". I will repeat what I said in Monday's blog that until the support levels at $1500-1530 in gold and $26-27 in silver are clearly broken, we should remain with our long positions. The technical picture for gold and silver has not changed and continues to look very good.