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

Trading Blog         Monday,  June 27,  2022

6/27/2022

 
MARKETS  UPDATE  (7:00 pm EDST)

It's still possible that the DOW's low of 29,653 on June 16 was the start of a new medium-term cycle, and it's also possible the S&P 500 and NASDAQ started new medium-term cycles on June 16 and June 17 (at 3,637 and 10,565, respectively). If this is the case, all three indices could rally strongly now (for at least a few more weeks - possibly longer). This week leads into the July 4th holiday this week-end in the U.S,, and equity markets tend to rally into holidays,  But we are still in a reversal zone through July 5, so a peak and a reversal down could begin anytime over the next six trading days. That could put us back on track for a fall to the final bottoms of older medium-term cycles in these indices. Today's downturn in the broad stock market is supporting this view. We will just have to wait to see which trend - bullish or bearish - will take over.

If all three indices roll over now and break below their June 16 -17 lows, we can assume they are moving to the final bottoms of older cycles. Those final bottoms could be this week or early next week and could be a good place to go long. If one or two of these indices (but not all three) make a new low (below the July 16-17 lows), we could get a bullish divergence signal, which would be an even stronger signal to buy. On the other hand, if this market rallies this week and next and exceeds its early June highs (33,272 in the DOW, 4,177 in the S&P 500, and 12.293 in the NASDAQ), then we'll have to assume the new, younger cycles are in effect and will rally for at least several more weeks. We will remain on the sidelines for now as we watch which direction the market will take this week.

Lest we lose track of the "forest for the trees", I should mention here that our longer-term view of this market is still bearish, and it still looks like equities are in the first stage of a serious long-term correction and that they are headed lower for several more years (see "Crash Update" on the Home page). If the markets turn (short-term) bullish now, we could get some sort of relief rally before they turn down again and continue their plunge to a long-term cycle bottom that could see losses exceeding 50% from the all-time highs of late Nov. 2021 (NASDAQ) and early January 2022 (DOW and S&P 500). The only thing that would negate this idea now would be for all three market indices to make new all-time highs. That doesn't appear to be likely at this point, but of course, things can change, and it seems that anything is possible in the volatile and crazy political and economic times we find ourselves in these days. For now, we are long-term bearish and will be looking to sell short the top of any significant bounce that does not exceed those all-time highs.

​The dilemma of newer cycle vs. older cycle is also presenting itself in the precious metals market. I am still favoring the idea that both gold and silver are bearish older cycles moving down to their final medium-term cycle bottoms. But they could also be newer cycles and at least short-term bullish and ready to rally back up again. This conflict should be resolved this week or early next week as we just entered a reversal zone specifically for gold and silver today (June 27 - July 5), and an imminent top or bottom should be forming and followed by a reversal (up or down). We are still holding short positions in both metals, so we are hoping the metals will fall some more and a bottom will form. A break below $1792 in gold would confirm the bearish view, and a break above $1877 would confirm the bullish view. In silver, a break below $20.52 is bearish, and a break above $22.49 is bullish. We will continue to use those upper limits in both metals as stop loss points for our short positions. If we get any new lows in this week's reversal zone, we will probably look to cover these positions. We will hold our short positions in gold and silver for now.

Crude oil prices have rallied smartly off of last Tuesday's low of $101.53 (Aug. contract chart), and that low was near the center of two reversal zones. This is good news for the long position we entered on Wednesday around $104. Prices closed just above $109 today. We can hold this long position now with a stop loss based on prices closing back below $102. If crude can now close back above $115, we could see a rally take prices as high as $145. 






Comments are closed.

    RSS Feed

    Archives

    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.