MARKETS UPDATE (7:15 pm EST)
As I stated in Friday's blog, I am anticipating a high in the broad stock market at some point over the next several weeks to be followed by a significant correction to sell short. According to some chart patterns in the analysis of this market, this high is way overdue, but there is also some ambiguity now in the market cycles which would allow for a little more rallying before a downturn. Directional momentum (still nearly 100% bullish in the DOW, S&P 500 and NASDAQ) supports this latter idea. If the DOW rallies to the 17,300 area and stalls, that may be a good point to sell short. A good target price in the S&P 500 would be the 1990 area. We are not far from these targets so we could see them this week. Still on the sidelines.
Gold and silver prices are still looking short-term "toppy" and seem like they could correct down some more. The $1290 area may be a good target price to go long in gold and perhaps the $20 area in silver. At the moment silver seems a little more bearish than gold. Still waiting to go long.
The U.S. Dollar Index broke through a resistance level at 80.40 last week. The dollar is now sitting just atop that level (which is now support) and if it bounces here it could help push precious metal prices lower. Directional momentum in this index is still quite bullish so more rallying in the dollar seems likely.
We are seeing a strong rally in crude oil being fueled by the geopolitical repercussions of last week's downing of a Malaysia Airlines jet over Ukraine, but we have now entered a time period (which will last into the first week of August) when crude can make a strong trend reversal, so this rally could top out anytime now. Directional momentum is still mixed bullish and bearish in this market which makes me reluctant to trade in any direction (and I am also wary of trading what is at the moment a news driven market). If this market is going to turn bearish prices will likely not exceed the $106 -$107 area before turning down. However, ongoing tension between Russia, Ukraine and the West, the recent takeover of Iraq by ISIS militants, and even the continuing civil war in Syria (also involving ISIS) are all contributing to potential volatility in oil prices now, so we cannot rule out more price surging. I will continue to monitor this market for stronger directional signals. Out of this market for now.
As I stated in Friday's blog, I am anticipating a high in the broad stock market at some point over the next several weeks to be followed by a significant correction to sell short. According to some chart patterns in the analysis of this market, this high is way overdue, but there is also some ambiguity now in the market cycles which would allow for a little more rallying before a downturn. Directional momentum (still nearly 100% bullish in the DOW, S&P 500 and NASDAQ) supports this latter idea. If the DOW rallies to the 17,300 area and stalls, that may be a good point to sell short. A good target price in the S&P 500 would be the 1990 area. We are not far from these targets so we could see them this week. Still on the sidelines.
Gold and silver prices are still looking short-term "toppy" and seem like they could correct down some more. The $1290 area may be a good target price to go long in gold and perhaps the $20 area in silver. At the moment silver seems a little more bearish than gold. Still waiting to go long.
The U.S. Dollar Index broke through a resistance level at 80.40 last week. The dollar is now sitting just atop that level (which is now support) and if it bounces here it could help push precious metal prices lower. Directional momentum in this index is still quite bullish so more rallying in the dollar seems likely.
We are seeing a strong rally in crude oil being fueled by the geopolitical repercussions of last week's downing of a Malaysia Airlines jet over Ukraine, but we have now entered a time period (which will last into the first week of August) when crude can make a strong trend reversal, so this rally could top out anytime now. Directional momentum is still mixed bullish and bearish in this market which makes me reluctant to trade in any direction (and I am also wary of trading what is at the moment a news driven market). If this market is going to turn bearish prices will likely not exceed the $106 -$107 area before turning down. However, ongoing tension between Russia, Ukraine and the West, the recent takeover of Iraq by ISIS militants, and even the continuing civil war in Syria (also involving ISIS) are all contributing to potential volatility in oil prices now, so we cannot rule out more price surging. I will continue to monitor this market for stronger directional signals. Out of this market for now.
RSS Feed