UPDATES ON THE BROAD STOCK MARKET and PRECIOUS METALS (10:30 pm EDT)
After rallying sharply off the deep low of April 7 (36,611), the DOW encountered resistance near its 15-day moving average last week and is now falling again. The S&P 500 is showing a similar pattern. These indices are now approaching those deep lows from April 7. Because we are in the center of another reversal zone (April 14 - 25), we might get a "double-bottom" formation this week which would support the idea of a new medium-term cycle and a new longer-term 3-year cycle starting together. A lower low this week could also define the start of these new cycles, but if these indices continue falling past this week (Friday is the last day of the reversal zone), then we may have to wait a bit longer for the bottom to a medium-term (and 3-year) cycle. The current medium-term cycle could have started on Jan. 13 or March 13 or April 7 (see my April 10 blog). If we do get a significant bottom this week, it may be a good spot to buy as a significant rally would be expected at the start of a new 3-year cycle. For now, I am still on the sidelines of the broad stock market.
As with the broad stock market, gold's medium-term cycle is not clear at the moment. A new cycle could have started with the $2835 low on Feb. 28 or the $2961 low on April 7. This may not be that relevant as either way, a longer-term 31 month cycle top is now due (overdue), and gold prices are now within the price range for such a top ($3400 - $3600, or even $3700). From this top, we anticipate a correction down of $400 - $600. Thus, a good short-selling opportunity may be imminent.
Today gold made a new all-time high at $3430 as silver barely made a new weekly high while remaining well below its yearly high (so far) of $34.54 on March 28. This creates a bearish divergence signal. Although we just exited a reversal zone specifically for the precious metals (it ended last Friday), we are still near the center of a general reversal zone that applies to both metals through the end of this week, so a top could be imminent. We will watch for a possible short-selling opportunity over the next few days.
Silver may have started a new medium-term cycle with its April 7 deep low of $28.56. Its sharp rise from there is now encountering some resistance around $33 (and the 45-day moving average) in the middle of a general reversal zone. If prices roll over here, they may head back down towards $30 and form a "double-bottom (not uncommon at the beginning or end of a cycle). If that happens, it may be a good buy spot, but if prices fall below $28, it would mean the cycle is turning bearish and we would stay on the sidelines. We are currently on the sidelines of silver.
After rallying sharply off the deep low of April 7 (36,611), the DOW encountered resistance near its 15-day moving average last week and is now falling again. The S&P 500 is showing a similar pattern. These indices are now approaching those deep lows from April 7. Because we are in the center of another reversal zone (April 14 - 25), we might get a "double-bottom" formation this week which would support the idea of a new medium-term cycle and a new longer-term 3-year cycle starting together. A lower low this week could also define the start of these new cycles, but if these indices continue falling past this week (Friday is the last day of the reversal zone), then we may have to wait a bit longer for the bottom to a medium-term (and 3-year) cycle. The current medium-term cycle could have started on Jan. 13 or March 13 or April 7 (see my April 10 blog). If we do get a significant bottom this week, it may be a good spot to buy as a significant rally would be expected at the start of a new 3-year cycle. For now, I am still on the sidelines of the broad stock market.
As with the broad stock market, gold's medium-term cycle is not clear at the moment. A new cycle could have started with the $2835 low on Feb. 28 or the $2961 low on April 7. This may not be that relevant as either way, a longer-term 31 month cycle top is now due (overdue), and gold prices are now within the price range for such a top ($3400 - $3600, or even $3700). From this top, we anticipate a correction down of $400 - $600. Thus, a good short-selling opportunity may be imminent.
Today gold made a new all-time high at $3430 as silver barely made a new weekly high while remaining well below its yearly high (so far) of $34.54 on March 28. This creates a bearish divergence signal. Although we just exited a reversal zone specifically for the precious metals (it ended last Friday), we are still near the center of a general reversal zone that applies to both metals through the end of this week, so a top could be imminent. We will watch for a possible short-selling opportunity over the next few days.
Silver may have started a new medium-term cycle with its April 7 deep low of $28.56. Its sharp rise from there is now encountering some resistance around $33 (and the 45-day moving average) in the middle of a general reversal zone. If prices roll over here, they may head back down towards $30 and form a "double-bottom (not uncommon at the beginning or end of a cycle). If that happens, it may be a good buy spot, but if prices fall below $28, it would mean the cycle is turning bearish and we would stay on the sidelines. We are currently on the sidelines of silver.
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