MARKETS UPDATE (1:30 am EST)
As I had expected, equity markets were optimistic last week as we moved toward the Fourth of July weekend with the DOW reaching a new all-time high and closing over 17,000 on Thursday. The S&P 500 and NASDAQ also made new highs, and momentum in all three indices remains nearly 100% bullish. The cycle picture and other technical signals for the broad stock market, however, are suggestive of a significant correction soon. The question is whether it will start now or later this month. Ideally, I would like to see new highs into the middle of this month and a top to sell short. The market's current bullish momentum supports this idea. The DOW could pause now and back down a bit (perhaps to the 16,800 - 16,900 area) before moving higher, or it could just continue up to a new high over the next two or three weeks in a strong rally. Any short-term dips might be worth buying now (especially if this market is in a blow-off mode), but our main focus is still to look for a top to sell short later in the month. On the sidelines for now.
Directional momentum in several gold and silver metal charts turned 100% bullish last week as did several precious metal mining company stock indices and ETFs. This is a very positive sign that we are close to (or have already reached) the final bottoms in the long-term cycles for gold and silver. Short-term technical signals, however, are still pointing to some sort of correction that would bottom ideally in the third or fourth week of July. Silver looks especially vulnerable to a brief but sharp correction. Any significant corrections now in gold and silver will be potential buying spots so we have to watch these metals carefully over the next several weeks for the ideal price and timing parameters. My overall strategy for the precious metals is bullish now. Prices may be a bit volatile this week in this market. On the sidelines and waiting to go long.
In last Sunday's blog I wrote that, "...it would not be surprising to see it [ the U.S. Dollar Index] bounce significantly up any day now...". This did indeed happen as the dollar found support at 79.8 on Monday and Tuesday and then shot up to close over 80.2 on Friday. The dollar surge pushed gold prices down a bit but did not have much effect on the price of silver. This dollar rally seems to have some steam so if it continues we could see lower gold and silver prices this week.
Crude oil prices dropped to $104 last Wednesday and they seem to be leveling off there. If the price can drop to $103 or lower we may have a good setup to go long. Still out of this market.
As I had expected, equity markets were optimistic last week as we moved toward the Fourth of July weekend with the DOW reaching a new all-time high and closing over 17,000 on Thursday. The S&P 500 and NASDAQ also made new highs, and momentum in all three indices remains nearly 100% bullish. The cycle picture and other technical signals for the broad stock market, however, are suggestive of a significant correction soon. The question is whether it will start now or later this month. Ideally, I would like to see new highs into the middle of this month and a top to sell short. The market's current bullish momentum supports this idea. The DOW could pause now and back down a bit (perhaps to the 16,800 - 16,900 area) before moving higher, or it could just continue up to a new high over the next two or three weeks in a strong rally. Any short-term dips might be worth buying now (especially if this market is in a blow-off mode), but our main focus is still to look for a top to sell short later in the month. On the sidelines for now.
Directional momentum in several gold and silver metal charts turned 100% bullish last week as did several precious metal mining company stock indices and ETFs. This is a very positive sign that we are close to (or have already reached) the final bottoms in the long-term cycles for gold and silver. Short-term technical signals, however, are still pointing to some sort of correction that would bottom ideally in the third or fourth week of July. Silver looks especially vulnerable to a brief but sharp correction. Any significant corrections now in gold and silver will be potential buying spots so we have to watch these metals carefully over the next several weeks for the ideal price and timing parameters. My overall strategy for the precious metals is bullish now. Prices may be a bit volatile this week in this market. On the sidelines and waiting to go long.
In last Sunday's blog I wrote that, "...it would not be surprising to see it [ the U.S. Dollar Index] bounce significantly up any day now...". This did indeed happen as the dollar found support at 79.8 on Monday and Tuesday and then shot up to close over 80.2 on Friday. The dollar surge pushed gold prices down a bit but did not have much effect on the price of silver. This dollar rally seems to have some steam so if it continues we could see lower gold and silver prices this week.
Crude oil prices dropped to $104 last Wednesday and they seem to be leveling off there. If the price can drop to $103 or lower we may have a good setup to go long. Still out of this market.
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