The Alternative Investor
  • Home
  • TRADING BLOG
  • Current Positions
  • Alternative Investor Strategy
  • ETFs
  • About Alternative Investor
  • Contact

Trading Blog           Monday,  January 8,  2018

1/8/2018

 
MARKETS  UPDATE  (3:00 pm EST)

We are seeing an unusual medium-term cycle manifesting in the broad stock market right now. This cycle is unusually bullish and is most likely expanding (distorting) beyond its normal length. It looks like the DOW and S&P 500 are rallying now from a sub-cycle corrective low from Dec. 29. This means it's possible we may not see the final cycle top in these two indices for several more weeks. Interestingly, the NASDAQ appears to have already started a new medium-term cycle off its Dec. 6 corrective low at 6,734. Because the start of a new cycle is almost always bullish, it's not surprising to see this index rallying strongly now, but it could turn bearish when the DOW and S&P 500 reach their tops and then start to take a significant correction down with them. Our immediate focus is still to sell short at the final tops to the DOW and S&P 500 cycles.

We are now in the middle of a reversal zone for equities (and other markets). Because of this distortion in the broad stock market cycles, I am going to extend this reversal zone a bit into Tuesday of next week. Today all three indices (DOW, S&P 500, NASDAQ) are making new highs. The S&P 500 cash chart, however, is just barely exceeding last week's high, and the S&P 500 March contract chart touched but did not exceed last week's high. This might be a case of intermarket bearish divergence, but all three indices need to close in the lower part of today's range to confirm that. This is not a strong enough signal to make me want to sell short now, especially with directional momentum still 100% bullish in this market. We will continue to watch for signs of a top this week as well as early next week (which could give us a stronger bearish divergence signal). Still on the sidelines of the broad stock market.

Gold and silver prices have been falling from last Thursday's highs ( $1326 in gold and $17.37 in silver). Those highs were early in the current reversal zone (Jan. 3 - 12) so we could be falling into a sub-cycle low now. Ideal targets for that low would be around $1290 in gold and $16.60 in silver. If instead these metals start pushing higher to challenge or exceed last week's high(s) then we will watch for a top this week as we are still in this reversal zone through Friday.
As I've stated in previous blogs, it looks like both gold and silver started new medium-term (and possibly longer-term) cycles on Dec. 12 and could turn very bullish now. This is why we are looking to go long on any significant correction that stays above those Dec. 12 lows ($1236 in gold and $15.63 in silver). On the sidelines of gold and silver but looking to go long soon.

Like the precious metals, crude oil could have made a top last Thursday at $61.21 (Feb. contract chart) and could now be falling to a sub-cycle low that should stay above $55.88. Crude likely started a new medium-term cycle on Dec. 7 (at $55.88) so the current pullback should just be modest and corrective as new cycles are usually bullish. A good target for this correction would be around $59. We will look to buy if prices can get there. We are still in the reversal zone all week, however, so prices could still push higher and exceed last Thursday's high. If that happens, we may look to sell short at a new top this week for that correction down to $59 (or lower). On the sidelines of crude oil for now.






Comments are closed.

    RSS Feed

    Archives

    September 2023
    August 2023
    July 2023
    June 2023
    May 2023
    April 2023
    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012

The Alternative Investor takes no advertising or incentives from any company, institution or investment that is discussed on the website.  Any trading and investing information presented is based on Alternative Investor's independent and unbiased research and analysis of current financial markets.

                                                                                                                                                            LEGAL and DISCLAIMER

All statements and trading/investment information on this website represent solely the personal opinion of The Alternative Investor based on information available at the time of writing and are intended for educational purposes only and are not a recommendation to buy or sell securities, commodities or currencies.  The Alternative Investor is not a licensed broker or financial advisor.  The Alternative Investor presents the trading and investing information on this site in good faith based on his own research into current financial markets but cannot and does not guarantee profit and does not guarantee against any financial losses that result from using this information.  All users of this website and the information presented within it assume full responsibility for their own personal trading/investing decisions and any losses that may result from them.

Trading and investing in any financial market may involve serious risk of loss.  For this reason all traders and investors should never place more money than they can afford to lose in any individual market.  The Alternative Investor monitors several markets and encourages a balanced distribution of funds among them (and others).  The Alternative Investor recommends consulting with a professional financial advisor before making any transactions with financial ramifications.  All trading, investing and financial transactions should always be made in accordance with the appropriate laws and legal regulations in your area of jurisdiction.

The Alternative Investor is an independent researcher and analyst and receives no compensation of any kind from any individuals, groups, companies or institutions discussed on this website.