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

Trading Blog       Monday (late night),  August 10,  2020

8/10/2020

 
MARKETS  UPDATE  (11:00 pm EDST)

For now, it looks like it was a good idea to cover our short position in the broad stock market last week (at least in the DOW and S&P 500), but there is still time for this market to turn down sharply and make us the victims of a "whipsaw" (unless, of course, we can sell short again before the fall - a possibility).

Today the DOW broke above its June 8th high of 27,580 (but it is still well below its all-time high of 29,568 from February), and the S&P 500 is getting VERY close to testing its February all-time high of 3,393. This market clearly has a lot of bullish energy. However, even if the S&P 500 succeeds in making a new all-time high, there will still be a strong intermarket BEARISH divergence signal as long as the DOW remains below its all-time high.

Our current cycle analysis is showing that the DOW and S&P 500 could be near the end of "old" medium-term cycles and ready to correct down sharply to the final bottoms in those cycles. But it is also possible that both these indices started new medium-term cycles from their mid-June lows and are therefore young and bullish. In that case, a correction is also due soon, but it would be a smaller sub-cycle correction. The NASDAQ is not showing this kind of ambiguity and is most likely an older medium-term cycle that is peaking and ready to take its final sharp correction down to its final bottom.
 
​OK, so what does this all mean for our trading?  Well, for now it means we remain on the sidelines.
We are currently in neutral territory BETWEEN two close reversal zones (July 28 - Aug. 4 and Aug. 12 - 19). Sometimes a reversal will happen in the center of this "neutral zone" (i.e. now). But this market seems very bullish and could easily rally to a peak in the second reversal period (which ends next week on Thursday).
If the DOW and/or S&P 500 are older cycles, they should peak this week or early next and then turn down for a sharp correction along with the NASDAQ (which may have peaked on Friday). If the DOW and S&P 500 are instead NEW cycles, they may take a small dip now but then push higher into September and also pull the NASDAQ up to new highs (and a very late final peak).

Bottom line: We are still aiming to sell short a final medium-tern cycle high in this market. Because the NASDAQ is most likely near its final peak, we will look to short sell an index fund or ETF tied to the NASDAQ if and when technical signals are appropriate (if the high didn't already happen last week on Friday).

The cycle patterns in gold and silver are also ambiguous at the moment, but regardless of cycle structure, some sort of correction is likely imminent in both metals. That could be starting now from Friday's highs, or if prices push higher this week it will start from a higher peak (especially if one metal makes a new high without the other - i.e. intermarket bearish divergence). It may be difficult to call the bottom of any correction, but for gold a range between $1850 - $1950 would be good. For silver, we would like to see a target between $20 - $25. If prices correct down to these areas, we may look to buy. Currently on the sidelines of gold and silver.

Crude oil's medium-term cycle is also in its late stage so we are now watching for its final peak before a sharp correction down to the final bottom. That peak could have been last week's high at $43.52 (Sept. contract chart), but it could also push higher into this week's reversal zone. If it does that, we may consider selling short. Otherwise, we will wait for the final correction down and perhaps buy the low. A good target for that low now would be around $33, but it could go lower. On the sidelines of crude oil for now.






Comments are closed.

    RSS Feed

    Archives

    June 2025
    May 2025
    April 2025
    March 2025
    February 2025
    January 2025
    December 2024
    November 2024
    October 2024
    September 2024
    August 2024
    July 2024
    June 2024
    May 2024
    April 2024
    March 2024
    February 2024
    January 2024
    December 2023
    November 2023
    October 2023
    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.