The Alternative Investor
  • Home
  • TRADING BLOG
  • Current Positions
  • Alternative Investor Strategy
  • ETFs
  • About Alternative Investor
  • Contact

Trading Blog         Monday,  April 18,  2016

4/18/2016

 
MARKETS  UPDATE  (4:30 pm EDT)

This week and next is a major reversal zone for many financial markets so we should be watching for significant highs or lows that could be turning points for these markets. April 22 (Friday) is the center point of this reversal zone. The likelihood of a reversal is highest near that day.

The broad stock market continues to edge higher so we should be watching for a top to sell short this week or next. The medium-term cycles of the DOW, S&P 500 and NASDAQ may all be peaking now, and if so we should expect a significant multi week correction to follow that will take us to the final cycle bottoms (and start of the next cycle). The depth of that correction will tell us if the overall trend of this market will remain bullish (directional momentum is currently 100% bullish in all three indices). For the current trend to turn strongly bearish, these indices would have to break below the start of their current medium-term cycles (that would be 15,450 for the DOW and 1,810 in the S&P 500). I don't think that's going to happen (although it's possible, especially since the markets are nervous and susceptible to panic selling). We will now watch for signs of a top, ideally later in the week. Still on the sidelines but looking to sell short this week or next.

We will also watch for a turning point in gold and silver this week. Both metals have been rising, but prices could take a dip into this week's reversal zone. If they do that, we will look to buy what could turn out to be a final cycle bottom in gold and maybe even one in silver (although it looks like silver's cycle ended- and a new one began- on April 1). It's still possible for gold to get down to our original target area around $1170 - $1180. If silver's new cycle began on April 1, any silver correction will likely stay above $15. If precious metal prices don't fall but instead rise into the end of the week, we will look to sell short. This is possible because directional momentum is strongly bullish in both gold and silver. We need to keep in mind, however, that COT charts still show Commercial traders (smart money) to be bearish on these metals which is suggestive of an imminent correction. On the sidelines of both gold and silver for now.

The direction of the precious metals this week may be determined by the U.S. dollar. The U.S. Dollar Index surged up early last week from a support line at 94 but is now backing down again. If the dollar moves back to its support at $94 and then reverses back up this week, we could see gold and silver rise and fall as described above. Note that $93 is very important support for the dollar. If that breaks, the greenback could be in trouble and precious metal prices could soar.

Last Wednesday crude oil made a double top to its high from March 18 (both near $42.50 in the May contract chart). Prices then fell steeply (on Sunday reaching $36.61) but are up a bit today. Directional momentum in this market is currently mixed bullish and bearish. If prices can snap back up and exceed that double top area, it can turn bullish. On the other hand, if crude starts closing below the 45 day moving average (currently around $38.73 and rising) then the market could turn bearish and prices could be headed down below $30 again.
We will remain on the sidelines of crude until the directional trend becomes clear.






Comments are closed.

    RSS Feed

    Archives

    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012

The Alternative Investor takes no advertising or incentives from any company, institution or investment that is discussed on the website.  Any trading and investing information presented is based on Alternative Investor's independent and unbiased research and analysis of current financial markets.

                                                                                                                                                            LEGAL and DISCLAIMER

All statements and trading/investment information on this website represent solely the personal opinion of The Alternative Investor based on information available at the time of writing and are intended for educational purposes only and are not a recommendation to buy or sell securities, commodities or currencies.  The Alternative Investor is not a licensed broker or financial advisor.  The Alternative Investor presents the trading and investing information on this site in good faith based on his own research into current financial markets but cannot and does not guarantee profit and does not guarantee against any financial losses that result from using this information.  All users of this website and the information presented within it assume full responsibility for their own personal trading/investing decisions and any losses that may result from them.

Trading and investing in any financial market may involve serious risk of loss.  For this reason all traders and investors should never place more money than they can afford to lose in any individual market.  The Alternative Investor monitors several markets and encourages a balanced distribution of funds among them (and others).  The Alternative Investor recommends consulting with a professional financial advisor before making any transactions with financial ramifications.  All trading, investing and financial transactions should always be made in accordance with the appropriate laws and legal regulations in your area of jurisdiction.

The Alternative Investor is an independent researcher and analyst and receives no compensation of any kind from any individuals, groups, companies or institutions discussed on this website.