MARKETS UPDATE (4:00 pm EST)
It looks like the U.S. Congress is advancing measures today to end the government shutdown with Democrats agreeing to grant a three week extension of government funding in exchange for Republican party promises that a larger immigration bill will be taken up by Feb. 8. Not surprisingly, the broad stock market is responding positively to this news, and an equity rally is pushing the DOW, S&P 500, and NASDAQ all to new weekly highs. Our hopes for an intermarket bearish divergence signal this week have been dashed again. We will still watch for other signs of a top this week as a reversal is possible any time now, but we are also looking towards the next reversal zone which starts late next week (Feb. 2 - 12) for a possible top to the current medium-term cycle in the DOW and S&P 500. (Notice that the next "deadline" to keep the government funded is Feb. 8 - right in the center of this reversal zone.) The current rally and the current medium-term cycle are both getting very "long in the tooth" so any correction now could be sharp and steep. Still on the sidelines of the broad stock market.
Gold and silver prices remained relatively flat today, but short-term technical signals are looking a little more bearish than bullish. If gold can break below last week's low of $1325 then we could see it move towards our desired target in the $1280 - $1300 range. Silver could rally a bit from last week's possibly significant bottom of $16.91, but if the rally doesn't get above $17.45, prices will likely turn down again and break below that low. We are still waiting for an ideal spot to buy. Remaining on the sidelines of gold and silver.
The U.S. Dollar Index is staying above its Jan. 16 low of 90.11 which could have been a turning point for the dollar as it was made in a reversal zone (and 90 is a critical support level). Some short-term technical signals are suggesting that the dollar could rally a bit more from here. If it does, it will help push gold and silver prices lower.
It still looks like crude oil is taking its first sub-cycle correction from a high of $16.81 on Jan. 16 (Feb. contract chart).
Our target for this correction is still close to $60 which we could (should) see this week or next. We are looking to buy near that price as it is still early in the current medium-term cycle and the larger trend in crude still looks bullish. On the sidelines of crude for now.
It looks like the U.S. Congress is advancing measures today to end the government shutdown with Democrats agreeing to grant a three week extension of government funding in exchange for Republican party promises that a larger immigration bill will be taken up by Feb. 8. Not surprisingly, the broad stock market is responding positively to this news, and an equity rally is pushing the DOW, S&P 500, and NASDAQ all to new weekly highs. Our hopes for an intermarket bearish divergence signal this week have been dashed again. We will still watch for other signs of a top this week as a reversal is possible any time now, but we are also looking towards the next reversal zone which starts late next week (Feb. 2 - 12) for a possible top to the current medium-term cycle in the DOW and S&P 500. (Notice that the next "deadline" to keep the government funded is Feb. 8 - right in the center of this reversal zone.) The current rally and the current medium-term cycle are both getting very "long in the tooth" so any correction now could be sharp and steep. Still on the sidelines of the broad stock market.
Gold and silver prices remained relatively flat today, but short-term technical signals are looking a little more bearish than bullish. If gold can break below last week's low of $1325 then we could see it move towards our desired target in the $1280 - $1300 range. Silver could rally a bit from last week's possibly significant bottom of $16.91, but if the rally doesn't get above $17.45, prices will likely turn down again and break below that low. We are still waiting for an ideal spot to buy. Remaining on the sidelines of gold and silver.
The U.S. Dollar Index is staying above its Jan. 16 low of 90.11 which could have been a turning point for the dollar as it was made in a reversal zone (and 90 is a critical support level). Some short-term technical signals are suggesting that the dollar could rally a bit more from here. If it does, it will help push gold and silver prices lower.
It still looks like crude oil is taking its first sub-cycle correction from a high of $16.81 on Jan. 16 (Feb. contract chart).
Our target for this correction is still close to $60 which we could (should) see this week or next. We are looking to buy near that price as it is still early in the current medium-term cycle and the larger trend in crude still looks bullish. On the sidelines of crude for now.
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