MARKETS UPDATE (4:00 pm EST)
After rallying very strongly last week, the broad stock market backed down a bit today. Such a corrective dip after a strong rally is normal. It may even give us a good spot to go long if we think the rally will continue. If the DOW gets down into the 27,600 - 27,675 range and the S&P 500 in the 3,100- 3130 range, we may consider going long. If we do this, we're hoping all three indices (DOW, S&P 500, and NASDAQ) will then rally strongly and break to new highs. If only one or two (not all three) make new highs in this reversal zone (bearish divergence), we could be setting up for a reversal and significant correction down instead. Let's remain on the sidelines for now and see if prices can push down into those ranges and find support.
Gold's cycle pattern is very ambiguous right now and has several possible interpretations. If prices hold above the $1445 area, we could see more rallying soon, but if that level breaks, we might see prices push down to a $1420 support line. If that happens, it could be an ideal spot to buy. Silver's medium-term cycle is a little more clear. It likely began with a bottom on Oct. 1 at $16.93. Prices have since moved lower than that which means this cycle's trend has been bearish. Silver could fall into a new low in our current reversal zone this week. There is a support area this week for silver around $16.35 and another one around $15.75. As with gold, these may turn out to be good buying spots for silver. Let's remain on the sidelines for now and see if prices move lower this week.
Crude oil most likely formed a significant sub-cycle bottom on Nov. 20 at $54.85 (Jan. contract chart) where we missed a good buy spot. Prices are now rising up to a sub-cycle peak in the $60 - $64 range. Let's stay on the sidelines for now and see how high this rally goes.
After rallying very strongly last week, the broad stock market backed down a bit today. Such a corrective dip after a strong rally is normal. It may even give us a good spot to go long if we think the rally will continue. If the DOW gets down into the 27,600 - 27,675 range and the S&P 500 in the 3,100- 3130 range, we may consider going long. If we do this, we're hoping all three indices (DOW, S&P 500, and NASDAQ) will then rally strongly and break to new highs. If only one or two (not all three) make new highs in this reversal zone (bearish divergence), we could be setting up for a reversal and significant correction down instead. Let's remain on the sidelines for now and see if prices can push down into those ranges and find support.
Gold's cycle pattern is very ambiguous right now and has several possible interpretations. If prices hold above the $1445 area, we could see more rallying soon, but if that level breaks, we might see prices push down to a $1420 support line. If that happens, it could be an ideal spot to buy. Silver's medium-term cycle is a little more clear. It likely began with a bottom on Oct. 1 at $16.93. Prices have since moved lower than that which means this cycle's trend has been bearish. Silver could fall into a new low in our current reversal zone this week. There is a support area this week for silver around $16.35 and another one around $15.75. As with gold, these may turn out to be good buying spots for silver. Let's remain on the sidelines for now and see if prices move lower this week.
Crude oil most likely formed a significant sub-cycle bottom on Nov. 20 at $54.85 (Jan. contract chart) where we missed a good buy spot. Prices are now rising up to a sub-cycle peak in the $60 - $64 range. Let's stay on the sidelines for now and see how high this rally goes.
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