In my post last Thursday I suggested waiting to see the next day's markets not realizing that it would be Good Friday and most of the markets would be closed. So I will comment now based on today's market behavior.
The broad stock market continues to look very bullish, but some sort of correction can occur right now as we are in a window of time where reversals are likely (another likely reversal time is centered around the middle of next week). The question is how severe could this correction be. There are several cycle and technical studies that point towards a significant drop, but momentum indicators are still strongly bullish, and I don't want to underestimate the power of market manipulators (like the Federal Reserve) to keep the market propped up. My strategy at this juncture will be to assume the correction will be minor and to wait and go long somewhere around 14,000 in the DOW. In the event there is a clear break below 14,000, we will abandon this strategy and possibly turn bearish if technical signals point in that direction. For now, then, we are still waiting on the sidelines.
Our crude oil long positions are still looking good, but the current strong rally is slowing down a bit and may be topping out now as we are in a time period for reversals. We are therefore looking to take profits here, possibly tomorrow if a bearish signal appears in the crude oil charts.
Gold and silver continue to hold above their support levels ($1500-1530 in gold, $26-27 in silver), and we should stay with our long positions in anticipation of a significant rally. The positive picture for precious metals has not changed.
As I mentioned in the last blog, it is looking like the Swiss Franc made a double bottom on March 27 to its low on March 14. This suggests the start of a new cycle in this currency and is a bullish signal. We will be looking to buy the Swiss Franc this week (maybe tomorrow) with a stop loss around that March 14 low (1.0463).