Today is technically the end of our current reversal zone for all markets (April 13 - 27), but I am going to extend it a bit into Thursday to accommodate some technical signals that could signify a reversal in the middle of this week. The broad stock market is rallying today on decreasing coronavirus fears and hopes of an easing of "lockdown" standards fairly soon to help businesses get back on their feet. The S&P 500 and NASDAQ are making new weekly highs today, but the DOW is not (but it's close). This gives us an intermarket bearish divergence signal until the DOW can break last week's high. We could see a turn-down start here. If we don't and the DOW pushes to new highs, we may have to wait a bit longer for a top and correction down. We are still planning to buy the bottom of that correction, as long as it doesn't go too low. Our targets are still around 22,000 in the DOW and 2,600 in the S&P 500. Still on the sidelines of the broad stock market.
Gold and silver prices are both down a bit today. We are getting mixed signals from this market right now. We have been looking to go long, but so far prices have not dipped to our ideal levels for buying. There is an equal chance of gold (and silver) rallying strongly now or taking another dive. A strong dip in the broad stock market could pull down the precious metals. Let's stay on the sidelines of this market for now.
Crude oil MAY have started a new medium-term cycle last Tuesday with its low at $6.50 (May contract chart), but as I wrote in my last blog, crude's recent dramatic and historical plunge into negative pricing has thrown a wrench into our normal cycle analysis. It is probably best to stay on the sidelines of crude trading for awhile as we re-calibrate the cycle patterns in this market. At least one benefit from all this is that we can expect lower prices at the gas pumps.
We are out of crude oil for now.