MARKETS UPDATE (4:30 pm EDST)
Last Thursday I wrote:
"That "gap zone" in the DOW is between 26,300 and 26,900. On Tuesday the DOW rallied to 26,600, but it has been falling from there and closed today just below 26,000. The S&P 500 also hasn't been able to close its gap.
The NASDAQ, however, has closed its gap, but it seems to be pausing now at the top of that gap. We have no intermarket bearish divergence this week as all three indices have made new weekly highs, but if the NASDAQ makes a new all-time high tomorrow or next week (it is very close) and the DOW and S&P 500 remain below their February all-time highs, we WILL have a strong bearish divergence signal. We are approaching the center-point of our current very wide reversal zone (June 8 - 30), but it is still not clear if we are going to get a high that reverses down or a low that reverses up."
The NASDAQ has still not broken its all-time high (yet), and the DOW and S&P 500 remain well below their all-time highs and below the "gap zone" described above. Bullish and bearish factors seem to be weighing equally on this indecisive market. I am favoring a bearish view at the moment (at least until The DOW and S&P 500 can push through their gaps) which means we could see a significant cycle low happen within what's left of the current reversal zone (it ends NEXT week on Wednesday). That could be a good buy spot. If instead the market decides to rally, we could see a high in that same time frame and a possible shorting opportunity. It's really a coin toss here so we will remain on the sidelines for now.
Gold and silver rallied today. If this is a decisive move up, we could see a strong rally now, but if we do, it would probably top out by the end of this week and be followed by a sharp downturn that should lead to the final bottom of the current medium-term cycle in both metals. That bottom would be an excellent spot to buy. I am tempted to sell short the top of any rally, but this market's current volatility makes that too risky. Let's stay on the sidelines and wait for that final bottom to buy.
Like the broad stock market, crude oil's chart is ambiguous right now and could be bullish or bearish. Because we are in the center of a reversal zone now and prices are rising, we could (should) see a top over the next several days and then a correction down. Any corrective drop that gets below the $37 low of June 12 (June contract chart) might be a good spot to buy. Let's stay on the sidelines of this market for now.
Last Thursday I wrote:
"That "gap zone" in the DOW is between 26,300 and 26,900. On Tuesday the DOW rallied to 26,600, but it has been falling from there and closed today just below 26,000. The S&P 500 also hasn't been able to close its gap.
The NASDAQ, however, has closed its gap, but it seems to be pausing now at the top of that gap. We have no intermarket bearish divergence this week as all three indices have made new weekly highs, but if the NASDAQ makes a new all-time high tomorrow or next week (it is very close) and the DOW and S&P 500 remain below their February all-time highs, we WILL have a strong bearish divergence signal. We are approaching the center-point of our current very wide reversal zone (June 8 - 30), but it is still not clear if we are going to get a high that reverses down or a low that reverses up."
The NASDAQ has still not broken its all-time high (yet), and the DOW and S&P 500 remain well below their all-time highs and below the "gap zone" described above. Bullish and bearish factors seem to be weighing equally on this indecisive market. I am favoring a bearish view at the moment (at least until The DOW and S&P 500 can push through their gaps) which means we could see a significant cycle low happen within what's left of the current reversal zone (it ends NEXT week on Wednesday). That could be a good buy spot. If instead the market decides to rally, we could see a high in that same time frame and a possible shorting opportunity. It's really a coin toss here so we will remain on the sidelines for now.
Gold and silver rallied today. If this is a decisive move up, we could see a strong rally now, but if we do, it would probably top out by the end of this week and be followed by a sharp downturn that should lead to the final bottom of the current medium-term cycle in both metals. That bottom would be an excellent spot to buy. I am tempted to sell short the top of any rally, but this market's current volatility makes that too risky. Let's stay on the sidelines and wait for that final bottom to buy.
Like the broad stock market, crude oil's chart is ambiguous right now and could be bullish or bearish. Because we are in the center of a reversal zone now and prices are rising, we could (should) see a top over the next several days and then a correction down. Any corrective drop that gets below the $37 low of June 12 (June contract chart) might be a good spot to buy. Let's stay on the sidelines of this market for now.
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