MARKETS UPDATE (10:00 pm EST)
Today was a holiday (President's Day) in the U.S. and equity markets were closed. The DOW, S&P 500 and NASDAQ did not make new highs on Friday so they could be rolling over now for some sort of correction. If instead they move higher this week, we could easily see a parabolic "blow-off" rally into next week or even the first week of March. In that situation we would be looking for a top to sell short, most likely next week. A moderate correction over the next few days might give us a spot to go long, but right now it looks like it may be best to just wait for the top of this rally as it moves into the center of the next strong reversal zone next week. On the sidelines of the broad stock market.
Gold and silver prices did not change much today. It is still not clear which way this market wants to move short-term. Next week is a strong reversal zone for these metals, and cycle patterns still support a quick price drop into that time. If we get that, the new lows would likely be a good spot to buy. It is also possible, however, to get a rally into next week's reversal zone. If gold and silver make new highs into next week (or especially if both rally and one makes a new high while the other does not) then we may look to sell short for a brief correction. The movement of gold and silver will likely depend on what happens to the U.S. Dollar Index over the next few weeks. Next week is also a strong reversal zone for the dollar so it is possible for the U.S. Dollar Index to complete a medium-term cycle bottom with a low (below its 99.50 low from Feb. 1) in that time frame. The dollar is now pushing against strong resistance in the 101 - 102 area. It could start falling now, and that would push gold and silver prices up. If the dollar continues to rally through that resistance (directional momentum is 100% bullish at the moment), then precious metal prices would likely fall. Still on the sidelines of gold and silver.
Last Thursday we went long in crude oil. Prices have been rallying from there, and we would like to see the rally continue to at least $55 (March contract chart) by the end of the week. Next week's reversal zone could turn prices back down so we will likely be looking to take any profits in our long position in that time frame. Holding my long position in crude oil.
Today was a holiday (President's Day) in the U.S. and equity markets were closed. The DOW, S&P 500 and NASDAQ did not make new highs on Friday so they could be rolling over now for some sort of correction. If instead they move higher this week, we could easily see a parabolic "blow-off" rally into next week or even the first week of March. In that situation we would be looking for a top to sell short, most likely next week. A moderate correction over the next few days might give us a spot to go long, but right now it looks like it may be best to just wait for the top of this rally as it moves into the center of the next strong reversal zone next week. On the sidelines of the broad stock market.
Gold and silver prices did not change much today. It is still not clear which way this market wants to move short-term. Next week is a strong reversal zone for these metals, and cycle patterns still support a quick price drop into that time. If we get that, the new lows would likely be a good spot to buy. It is also possible, however, to get a rally into next week's reversal zone. If gold and silver make new highs into next week (or especially if both rally and one makes a new high while the other does not) then we may look to sell short for a brief correction. The movement of gold and silver will likely depend on what happens to the U.S. Dollar Index over the next few weeks. Next week is also a strong reversal zone for the dollar so it is possible for the U.S. Dollar Index to complete a medium-term cycle bottom with a low (below its 99.50 low from Feb. 1) in that time frame. The dollar is now pushing against strong resistance in the 101 - 102 area. It could start falling now, and that would push gold and silver prices up. If the dollar continues to rally through that resistance (directional momentum is 100% bullish at the moment), then precious metal prices would likely fall. Still on the sidelines of gold and silver.
Last Thursday we went long in crude oil. Prices have been rallying from there, and we would like to see the rally continue to at least $55 (March contract chart) by the end of the week. Next week's reversal zone could turn prices back down so we will likely be looking to take any profits in our long position in that time frame. Holding my long position in crude oil.
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