MARKETS UPDATE (5:00 pm EDST)
Last week we were speculating on whether or not the broad stock market wanted to be (short-term) bullish or bearish. It's looking like it wants to be bullish. We can now say with a fair amount of confidence that all three of our stock market indices (DOW, S&P 500, NASDAQ) started new medium-term cycles with their lows on June 17 (DOW and S&P 500) and June 16 (NASDAQ). This means they are very young, and usually cycles are very bullish in their early stage. We are probably on track for a significant rally into September, but we need to keep in mind that we don't expect these new medium-term cycles to make new ALL-TIME highs (at least not ALL THREE of them). Our long-term view is still that a LONG-TERM (90 year) cycle likely peaked in November 2021 in the NASDAQ and in January this year in the DOW and S&P 500. This means that a very serious long-term correction from those highs is most likely already in progress and will continue to move lower (interrupted by periodic relief rallies) over the next several years (see Crash Update on the Home page).
Despite this current rally in our medium-term equity cycles, they are also due for a sub-cycle corrective dip anytime now. We just entered a new strong reversal zone (Aug. 1 - 11), so a top could form in this time frame. Today the NASDAQ pushed past its high from early June, but the DOW and S&P 500 remained below their early June highs. This gives us a bearish divergence signal inside a reversal zone. Any corrective dip now might give us a good buy spot, as long as it doesn't go too low. Let's stay on the sidelines of the broad stock market for now.
Gold and silver prices also edged higher today to new weekly highs. Friday was technically the last day of our reversal zone for these metals, but we could still see a top and reversal in our new general reversal zone.this week or next. We're pretty confident that gold's low at $1681 on July 21 was a significant cycle bottom (and probably the start of a new medium-term cycle), so we are going to hold our long position in gold for now and probably ride out any corrective dips that may happen this week or next. Our stop loss for this position can be based on gold falling and closing below $1681.
It is not so clear that silver's lows at $18.15 and $18.25 on July 14 and July 21, respectively, were a medium-term cycle bottom (double-bottom), but it is possible as silver has rallied strongly from there. If that was an old cycle bottom (and thus the start of a new cycle), any corrective dips now should hold above $18.15. If the old cycle is still unfolding, however, any correction would go below $18.15. We are still out of silver, so we may be looking to buy any corrective dips as a new medium-term cycle is due to begin (if it hasn't already from those two lows just mentioned). Let's stay on the sidelines of silver for now.
After making a run to just below $102 (Sept. contract chart) last Friday, crude oil prices plummeted today and closed just under $94. Tomorrow is the last day of our reversal zone specifically for crude (last Friday's top may have been the reversal point), but we are now in a strong general reversal zone that applies to all our markets. We could still see a final bottom to the current medium-term cycle in this time frame. There's a chance that the low of $88.23 on July 14 was already the start of a new medium-term cycle, but that was a little early (and not in a reversal zone). It's more likely the bottom is going to form in this new reversal zone at a lower price (or maybe a double-bottom near $88). A good target for a bottom is still around $85, and that may be a good place to buy over the next week or two. If prices get below $83, however, we may refrain from any buying as the market could be turning bearish. Let's stay on the sidelines of crude for now.
Last week we were speculating on whether or not the broad stock market wanted to be (short-term) bullish or bearish. It's looking like it wants to be bullish. We can now say with a fair amount of confidence that all three of our stock market indices (DOW, S&P 500, NASDAQ) started new medium-term cycles with their lows on June 17 (DOW and S&P 500) and June 16 (NASDAQ). This means they are very young, and usually cycles are very bullish in their early stage. We are probably on track for a significant rally into September, but we need to keep in mind that we don't expect these new medium-term cycles to make new ALL-TIME highs (at least not ALL THREE of them). Our long-term view is still that a LONG-TERM (90 year) cycle likely peaked in November 2021 in the NASDAQ and in January this year in the DOW and S&P 500. This means that a very serious long-term correction from those highs is most likely already in progress and will continue to move lower (interrupted by periodic relief rallies) over the next several years (see Crash Update on the Home page).
Despite this current rally in our medium-term equity cycles, they are also due for a sub-cycle corrective dip anytime now. We just entered a new strong reversal zone (Aug. 1 - 11), so a top could form in this time frame. Today the NASDAQ pushed past its high from early June, but the DOW and S&P 500 remained below their early June highs. This gives us a bearish divergence signal inside a reversal zone. Any corrective dip now might give us a good buy spot, as long as it doesn't go too low. Let's stay on the sidelines of the broad stock market for now.
Gold and silver prices also edged higher today to new weekly highs. Friday was technically the last day of our reversal zone for these metals, but we could still see a top and reversal in our new general reversal zone.this week or next. We're pretty confident that gold's low at $1681 on July 21 was a significant cycle bottom (and probably the start of a new medium-term cycle), so we are going to hold our long position in gold for now and probably ride out any corrective dips that may happen this week or next. Our stop loss for this position can be based on gold falling and closing below $1681.
It is not so clear that silver's lows at $18.15 and $18.25 on July 14 and July 21, respectively, were a medium-term cycle bottom (double-bottom), but it is possible as silver has rallied strongly from there. If that was an old cycle bottom (and thus the start of a new cycle), any corrective dips now should hold above $18.15. If the old cycle is still unfolding, however, any correction would go below $18.15. We are still out of silver, so we may be looking to buy any corrective dips as a new medium-term cycle is due to begin (if it hasn't already from those two lows just mentioned). Let's stay on the sidelines of silver for now.
After making a run to just below $102 (Sept. contract chart) last Friday, crude oil prices plummeted today and closed just under $94. Tomorrow is the last day of our reversal zone specifically for crude (last Friday's top may have been the reversal point), but we are now in a strong general reversal zone that applies to all our markets. We could still see a final bottom to the current medium-term cycle in this time frame. There's a chance that the low of $88.23 on July 14 was already the start of a new medium-term cycle, but that was a little early (and not in a reversal zone). It's more likely the bottom is going to form in this new reversal zone at a lower price (or maybe a double-bottom near $88). A good target for a bottom is still around $85, and that may be a good place to buy over the next week or two. If prices get below $83, however, we may refrain from any buying as the market could be turning bearish. Let's stay on the sidelines of crude for now.
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