UPDATE on PRECIOUS METALS and CRUDE OIL (1:30 pm EST)
The Federal Reserves's meeting this week and its policy statement released yesterday basically gave the message that the Fed is "staying the course" with their plans to raise interest rates. Although there was no rate hike this month, one is expected in December, and more are slated for next year. This hawkish tone from the Fed is boosting the U.S. Dollar Index which in turn is driving gold and silver prices lower. We have been looking to buy a correction in the precious metals, but we don't want to see that correction go too low. If gold can stay above $1200, we will still look to buy, but a close below there would be a bearish sign and would keep me on the sidelines. We also don't want to see silver move below $13.95 (that was the start of the current medium-term cycle on Sept. 11) as that could also suggest this market is turning bearish. Still on the sidelines of both metals.
Crude oil prices are also falling. As I've stated recently, we are near the end of the current medium-term cycle in crude, and prices have been falling towards the final cycle bottom. There is also the possibility that the end of this medium-term cycle will also coincide with the end of a longer-term (3 year) cycle in crude. The deep correction we are seeing now is supporting that idea. The bottom line here (pun intended) is that we are looking to buy this final bottom in both cycles as a good rally should follow from there. There is a reversal zone specifically for crude coming up Nov. 19 - 28. We will watch for a final cycle low in that time frame. On the sidelines of crude oil for now.
The Federal Reserves's meeting this week and its policy statement released yesterday basically gave the message that the Fed is "staying the course" with their plans to raise interest rates. Although there was no rate hike this month, one is expected in December, and more are slated for next year. This hawkish tone from the Fed is boosting the U.S. Dollar Index which in turn is driving gold and silver prices lower. We have been looking to buy a correction in the precious metals, but we don't want to see that correction go too low. If gold can stay above $1200, we will still look to buy, but a close below there would be a bearish sign and would keep me on the sidelines. We also don't want to see silver move below $13.95 (that was the start of the current medium-term cycle on Sept. 11) as that could also suggest this market is turning bearish. Still on the sidelines of both metals.
Crude oil prices are also falling. As I've stated recently, we are near the end of the current medium-term cycle in crude, and prices have been falling towards the final cycle bottom. There is also the possibility that the end of this medium-term cycle will also coincide with the end of a longer-term (3 year) cycle in crude. The deep correction we are seeing now is supporting that idea. The bottom line here (pun intended) is that we are looking to buy this final bottom in both cycles as a good rally should follow from there. There is a reversal zone specifically for crude coming up Nov. 19 - 28. We will watch for a final cycle low in that time frame. On the sidelines of crude oil for now.
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