MARKETS UPDATE (5:30pm EDST)
Today is a holiday (Juneteenth Day) and stock markets are closed in the U.S.
It appears that all three of our broad stock market indices (DOW, S&P 500, NASDAQ) are near the end of their current medium-term cycles and are ready to hit their final cycle bottoms. We are now within several overlapping reversal zones that essentially create one huge general reversal zone from now through July 5. The likelihood of these indices making their final cycle bottoms this week or next is very high. Good targets for these bottoms could be around 28,500 - 29,300 in the DOW, 3,200-3,600 in the S&P 500, and 8,500-10,000 for the NASDAQ. If we get a case of intermarket bullish divergence (one or two but not all three indices making new yearly lows) near these ranges this week or next, we may consider going long for a brief rally that would kick off the new cycles. However, I don't think any new rally will make new all-time highs as this market is looking very bearish. We may just wait to sell short the top of any rally off the bottoms that could be forming over the next two weeks. A major long-term cycle correction may already be underway in this market (see my "Crash Update" on the Home page). We are currently on the sidelines of the broad stock market.
It is not clear at the moment if gold and silver are starting new medium-term cycles or if they are near the end of older medium-term cycles. The difference is important. If the cycles are new (i.e. gold starting with its $1,792 low on May 16 and silver starting with its $20.52 low on May 13), then gold could exceed last week's high at $1877 and even go much higher, and silver could exceed its high of $22.49 from June 6 and also rally strongly from there. But if one or both of these cycles are older, they are bearish with prices headed lower because both have now gone below the start of their cycles ($1892 for gold and $24.02 for silver - both on March 29). Some traders (like me) were stopped out of their short gold position a little over a week ago. Others may still be short. We all should still have a short position in silver. I am recommending holding these short positions in both metals for now with stop losses set at their recent highs ($1877 in gold and $22.49 in silver). Traders should be ready, however, to cover these positions quickly if we see start to see signs of a bullish rally. Let's hold any short positions in both gold and silver for now.
Last week crude oil prices fell steeply. A corrective dip was due in this market, and prices are definitely moving into a significant sub-cycle low. This week we move into the center of a strong reversal zone specifically relevant to crude (June 20-28), so it is a good time for a sub-cycle bottom. A good target for this bottom could be around $104 (August contract chart), and that might be a good place to buy if prices stabilize there. A weekly close below $102 (and especially below $100), however, would be a bearish sign and would keep us on the sidelines. If we get a bounce near $104, prices could rally and exceed last week's high of $120.88 and even go much higher. For now, we remain on the sidelines of crude.
Today is a holiday (Juneteenth Day) and stock markets are closed in the U.S.
It appears that all three of our broad stock market indices (DOW, S&P 500, NASDAQ) are near the end of their current medium-term cycles and are ready to hit their final cycle bottoms. We are now within several overlapping reversal zones that essentially create one huge general reversal zone from now through July 5. The likelihood of these indices making their final cycle bottoms this week or next is very high. Good targets for these bottoms could be around 28,500 - 29,300 in the DOW, 3,200-3,600 in the S&P 500, and 8,500-10,000 for the NASDAQ. If we get a case of intermarket bullish divergence (one or two but not all three indices making new yearly lows) near these ranges this week or next, we may consider going long for a brief rally that would kick off the new cycles. However, I don't think any new rally will make new all-time highs as this market is looking very bearish. We may just wait to sell short the top of any rally off the bottoms that could be forming over the next two weeks. A major long-term cycle correction may already be underway in this market (see my "Crash Update" on the Home page). We are currently on the sidelines of the broad stock market.
It is not clear at the moment if gold and silver are starting new medium-term cycles or if they are near the end of older medium-term cycles. The difference is important. If the cycles are new (i.e. gold starting with its $1,792 low on May 16 and silver starting with its $20.52 low on May 13), then gold could exceed last week's high at $1877 and even go much higher, and silver could exceed its high of $22.49 from June 6 and also rally strongly from there. But if one or both of these cycles are older, they are bearish with prices headed lower because both have now gone below the start of their cycles ($1892 for gold and $24.02 for silver - both on March 29). Some traders (like me) were stopped out of their short gold position a little over a week ago. Others may still be short. We all should still have a short position in silver. I am recommending holding these short positions in both metals for now with stop losses set at their recent highs ($1877 in gold and $22.49 in silver). Traders should be ready, however, to cover these positions quickly if we see start to see signs of a bullish rally. Let's hold any short positions in both gold and silver for now.
Last week crude oil prices fell steeply. A corrective dip was due in this market, and prices are definitely moving into a significant sub-cycle low. This week we move into the center of a strong reversal zone specifically relevant to crude (June 20-28), so it is a good time for a sub-cycle bottom. A good target for this bottom could be around $104 (August contract chart), and that might be a good place to buy if prices stabilize there. A weekly close below $102 (and especially below $100), however, would be a bearish sign and would keep us on the sidelines. If we get a bounce near $104, prices could rally and exceed last week's high of $120.88 and even go much higher. For now, we remain on the sidelines of crude.
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