BRIEF COMMENTS ON THE BROAD STOCK MARKET and PRECIOUS METALS (3:30 pm EST)
It seems like the "Santa Claus" rally in equities is continuing "full steam ahead" today as all three major indices (DOW, S&P 500, NASDAQ) are making new weekly highs. But only the S&P 500 is making a new ALL-TIME high, and this creates an intermarket bearish divergence signal (until the other two indices make new all-time highs - they are not far from doing this). We are now in the dead center of a strong reversal zone (Dec. 21 - 31), so a correction down from these highs could be imminent. Will the 'holiday spirit" carry this rally into the New Year's Day week-end? Maybe.
If it does, and if this bearish divergence persists into the end of the week, we may consider selling the market short. We will stay on the sidelines of the broad stock market for now.
Our bearish divergence signal between gold and silver from last week is remaining intact today as gold couldn't make a new monthly high and silver did. A correction could be imminent here because of the general reversal zone mentioned above. We'll stay on the sidelines of the precious metals for now.
It seems like the "Santa Claus" rally in equities is continuing "full steam ahead" today as all three major indices (DOW, S&P 500, NASDAQ) are making new weekly highs. But only the S&P 500 is making a new ALL-TIME high, and this creates an intermarket bearish divergence signal (until the other two indices make new all-time highs - they are not far from doing this). We are now in the dead center of a strong reversal zone (Dec. 21 - 31), so a correction down from these highs could be imminent. Will the 'holiday spirit" carry this rally into the New Year's Day week-end? Maybe.
If it does, and if this bearish divergence persists into the end of the week, we may consider selling the market short. We will stay on the sidelines of the broad stock market for now.
Our bearish divergence signal between gold and silver from last week is remaining intact today as gold couldn't make a new monthly high and silver did. A correction could be imminent here because of the general reversal zone mentioned above. We'll stay on the sidelines of the precious metals for now.
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