A rally in the broad stock market continued today suggesting a bullish tailwind into next week - reinforced by the fact that all three indices (DOW, S&P 500, and NASDAQ) are now above both their 15-day and 45-day moving averages. The next headwind for this rally is coming in the second half of next week with some strong potential "pivot points" Wednesday - Thursday. Stronger resistance may come the following week in our next general reversal zone April 11 - 20. As always, we will be prepared to sell our long position if a serious correction looks imminent. But if these new medium-term cycles are bullish, any corrections now could be modest, and a rally could continue to at least test the Dec. 13, 2022 high in the DOW (34,712) and the Feb.2 highs in the S&P 500 and NASDAQ (4,142 and 12,270, respectively). For now, we will hold our long position in this market.
Silver made yet another new weekly high today ($24.16) while gold is still below its high from last week ($2007). We are thus ending the week with a strong intermarket bearish divergence signal. We also note that last week's high in gold was a new yearly high, but silver has yet to break its high from last year (it is close) for yet another strong bearish divergence signal. This means a downward reversal could be imminent and could happen any day now. We are very interested in this next corrective drop in gold. If it is strong and falls below $1807, it will support the idea that an old 23-year cycle is falling to its final bottom due this year or next. But if a correction is modest and gold rallies back up above $2000 (and especially $2070), it would mean that a new 23-year cycle has already begun (from last year's "double-bottom" lows of $1616 and $1617 on Sept. 28 and Nov. 3, respectively). We are thus at an important crossroads in the long-term 23-year cycle in gold. If a new 23-year cycle has started, that would be VERY bullish for gold prices. For now, we will hold our short position in gold with a stop loss based on a close above $2000.
Silver's new medium-term cycle (which started on March 10 at $19.91) has been very bullish, but its steep rise to $24 in just three weeks is leading me to think that, like gold, it may be peaking early. If that's the case, we won't want to buy any corrective drops as the price may be heading back below $19.91 soon. We will remain on the sidelines of silver for now.
The U.S. Dollar Index seems to be finding support at the 102 level. If it launches a rally from there, it would help turn down gold and silver prices, so we will watch this carefully now.
Crude oil prices are breaking above $75 today (May contract chart) and they are testing the 45-day moving average. Crude may be taking its signals from the broad stock market and is looking quite bullish. It's starting to look like the low of $64.36 on March 20 could be the start of a new medium-term cycle (and maybe even a new 3-year cycle). If that's the case, crude is bullish, and we will want to go long on any significant corrective drops. For now, we will remain on the sidelines.