Even as plenty of "saber-rattling" between the Trump Administration and Iran continue today, Wall Street may be shrugging off this geopolitical tension. The DOW opened 200 points down, but slowly gained those points back and closed with the day with a 68 point gain. We may still get a top this week (or next) in this market before a significant correction down as we move into our next reversal zone tomorrow (Jan. 7 - 16). Ideally, we would like to see one or two, but not all three, stock market indices (DOW, S&P 500, NASDAQ) make new highs this week or next for a possible spot to sell short. The correction we're expecting should be substantial as it will be the final correction to the bottom of the current medium-term cycle. Once we hit that bottom, however, we will be looking to buy (assuming it doesn't go too low) as we are expecting the next medium-term cycle to be bullish into the first half of this new year. On the sidelines of the broad stock market for now.
Gold and silver may also make a top in this new reversal zone. Prices in both metals soared to new highs today but then dropped, and they are closing in the lower part of today's range. This is bearish behavior and may indicate that prices are close to rolling over. That may even be happening today, but we would prefer to see a top a little later this week (or early next week). We are still looking to buy any significant corrective dip as the precious metals are looking quite bullish now. Ideal buying areas for a corrective drop would be near $1500 in gold and $17 in silver. Staying on the sidelines of gold and silver but looking to buy soon.
Crude oil prices made a new high today at $64.72 before backing down a bit and closing at $62.83 (Feb. contract chart). U.S./Iran tension is likely keeping this market bullish and could easily push prices higher into this week's reversal zone. If so, we will be on the lookout for a top and then a corrective drop that could be significant. A drop to the $59 level may be a good spot to buy. Still on the sidelines of crude oil.