The broad stock market continues to edge lower today yet momentum remains strongly bullish suggesting the possibility of a little more rallying before a deeper correction asserts itself. We are near the end of significant cycles in the DOW, S&P 500 and NASDAQ indices which could bring the DOW down to the 15,700 - 15,800 area soon. We are entering yet another reversal zone this week and this may cause the market to bounce here and may still present us with an ideal entry point to go short. Any short-selling trade would likely be short-term, however, as the market would likely resume its bullishness after the correction. Still on the sidelines here.
I am getting ready to go long in gold and silver any day now. There are some major bullish momentum signals appearing in several precious metal sector charts as I am writing this. Prices have been edging up over the last several days, so this week's reversal zone may deflect them down a bit for a good entry point to go long. On the sidelines at the moment but waiting to go long (probably this week).
Crude oil prices are now moving below the $92 level that started the new cycle in this market on Nov.27. This is a bearish sign and points to significantly lower prices ahead. There are technical indicators, however, suggesting a short-term bounce from the current price (or even from $89 -$90) up towards the $94 - $96 area. This week's reversal zone may encourage that bounce. In terms of cycles and timing, an ideal scenario would be for a rally now into the last week of January that does not exceed $97. This would create an ideal opportunity to sell the market short. Directional momentum remains strongly bearish. Still on the sidelines of this market.