PRECIOUS METALS and BROAD STOCK MARKET Updates (4:00 pm EDST)
Last week neither gold nor silver broke below their lows from early March so we still don't have a bullish divergence signal (i.e. one metal breaking its low but not the other). Curiously, in the nearby contract charts both metals did break below their March lows, but this still gives us no bullish divergence. Although a bottom in one or both metals could be forming here, I am reluctant to buy. Let's see if prices can push a bit lower by Wednesday and give us that bullish divergence signal we like to see at a significant bottom. This market is very tricky now as there is the potential for a strong rally, but also a strong plunge. Out of gold and silver for now.
The DOW blew through last week's high (26,109) early today and is now breaking above its cycle high from Feb. 25 (26,241). This is bullish and means we will likely see a rally into the next reversal zone (April 9 - 17) and possibly a top to sell short then. The S&P 500 is also making new highs today, but the NASDAQ is a tad short of breaking its high from last week. This is potentially bearish divergence, but we are not in a reversal zone so I think the NASDAQ will follow the other two indices and break its high (7,850) shortly. These indices did not give us a "dipping" opportunity to buy today, but if we get one over the next few days we may consider going long to ride a potential rally into mid-April. Otherwise, we may have to wait to sell short a top in that next reversal zone. Still on the sidelines of the broad stock market.
Last week neither gold nor silver broke below their lows from early March so we still don't have a bullish divergence signal (i.e. one metal breaking its low but not the other). Curiously, in the nearby contract charts both metals did break below their March lows, but this still gives us no bullish divergence. Although a bottom in one or both metals could be forming here, I am reluctant to buy. Let's see if prices can push a bit lower by Wednesday and give us that bullish divergence signal we like to see at a significant bottom. This market is very tricky now as there is the potential for a strong rally, but also a strong plunge. Out of gold and silver for now.
The DOW blew through last week's high (26,109) early today and is now breaking above its cycle high from Feb. 25 (26,241). This is bullish and means we will likely see a rally into the next reversal zone (April 9 - 17) and possibly a top to sell short then. The S&P 500 is also making new highs today, but the NASDAQ is a tad short of breaking its high from last week. This is potentially bearish divergence, but we are not in a reversal zone so I think the NASDAQ will follow the other two indices and break its high (7,850) shortly. These indices did not give us a "dipping" opportunity to buy today, but if we get one over the next few days we may consider going long to ride a potential rally into mid-April. Otherwise, we may have to wait to sell short a top in that next reversal zone. Still on the sidelines of the broad stock market.
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