The broad stock market continues to push higher as today all three indices (DOW, S&P 500, NASDAQ) made new weekly highs. This negates any chance of a bearish divergence signal this week; however, we are still in a reversal zone at least through Thursday, so we could still see some sort of top form this week. All three indices are still well below their all-time highs. It will be interesting to see which, if any, index can challenge or even exceed its all-time high as we move into September. We are still on the sidelines of this market until we see a significant corrective dip to buy. If we don't get that soon, we may just wait to sell short at the final top of this new medium-term cycle.
Gold and silver seem to be correcting down as we move into a reversal zone specifically for the precious metals (Aug. 12 -23). If prices don't push higher this week, we should be watching for a significant low, and perhaps a spot to buy silver (we are already long in gold). If prices DO push higher, we will reverse our strategy and possibly take profits in our long gold position. As long as gold can stay significantly above $1700, we will try and ride out any corrective dips. We are currently long in gold and still out of silver.
Today crude prices dropped briefly just slightly below the Aug. 5 low of $87.01 (which we had labeled as the start of a new medium-term cycle). That could be a bullish "double-bottom" low as we are still in a reversal zone and the final medium-term cycle bottom is due. If prices start closing below today's low ($86.82), and especially below $85, we will unload our long position in crude and wait for a new bottom. For now, we are still holding our long position in this market.