MARKETS UPDATE (11:30 pm EST)
All three of our broad stock market indices (DOW, S&P 500, NASDAQ) were able to make new weekly highs last week, which negated our bearish divergence signal from earlier in the week. Nevertheless, a corrective drop seems to be proceeding from last Wednesday's and Thursday's highs as we approach the center of another strong general reversal zone (Dec. 1 - 9). Let's see how far this correction can go without the benefit of that bearish divergence. We may look for a buy spot if it drops lower into the end of the week as there is still a chance equities could stage a "Santa Claus rally" into the new year. Let's stay on the sidelines for now.
After making new weekly highs early in the day, both gold and silver prices took sharp declines and were significantly down by the closing bell. Today's highs were near the center of a reversal zone specifically for the precious metals (Nov. 28 - Dec. 9), so a significant corrective drop has likely started. As with the broad stock market, we may want to buy a sub-cycle correction soon (as long as it doesn't go to low) because both metals still look bullish (especially silver) and could rally some more. For now, we remain on the sidelines of both metals.
Crude oil prices also seem to be dropping into our general reversal zone from an $83.34 (Jan. contract chart) high on Dec. 1. Crude may be forming a support line around $75, but if that breaks and prices move below last week's low of $73.60, we could see crude moving toward $65. In my blog on Nov. 22, I wrote:
"Last Friday, the Biden White House released a statement declaring its Administration would repurchase crude oil for the SPR (Strategic Petroleum Reserve) when prices get at or below $67 - $72 per barrel. If the Administration follows through with this plan, that price range could be a good spot to buy. As mentioned above, if crude turns bearish and breaks below $74.96, we could see prices fall quickly into Biden's price range,"
We are still interested in possibly buying if crude can fall into that $67 - $72 price area. That could happen this week or even next week as we enter another reversal zone for crude Dec. 13 - 22. We will stay on the sidelines for now.
All three of our broad stock market indices (DOW, S&P 500, NASDAQ) were able to make new weekly highs last week, which negated our bearish divergence signal from earlier in the week. Nevertheless, a corrective drop seems to be proceeding from last Wednesday's and Thursday's highs as we approach the center of another strong general reversal zone (Dec. 1 - 9). Let's see how far this correction can go without the benefit of that bearish divergence. We may look for a buy spot if it drops lower into the end of the week as there is still a chance equities could stage a "Santa Claus rally" into the new year. Let's stay on the sidelines for now.
After making new weekly highs early in the day, both gold and silver prices took sharp declines and were significantly down by the closing bell. Today's highs were near the center of a reversal zone specifically for the precious metals (Nov. 28 - Dec. 9), so a significant corrective drop has likely started. As with the broad stock market, we may want to buy a sub-cycle correction soon (as long as it doesn't go to low) because both metals still look bullish (especially silver) and could rally some more. For now, we remain on the sidelines of both metals.
Crude oil prices also seem to be dropping into our general reversal zone from an $83.34 (Jan. contract chart) high on Dec. 1. Crude may be forming a support line around $75, but if that breaks and prices move below last week's low of $73.60, we could see crude moving toward $65. In my blog on Nov. 22, I wrote:
"Last Friday, the Biden White House released a statement declaring its Administration would repurchase crude oil for the SPR (Strategic Petroleum Reserve) when prices get at or below $67 - $72 per barrel. If the Administration follows through with this plan, that price range could be a good spot to buy. As mentioned above, if crude turns bearish and breaks below $74.96, we could see prices fall quickly into Biden's price range,"
We are still interested in possibly buying if crude can fall into that $67 - $72 price area. That could happen this week or even next week as we enter another reversal zone for crude Dec. 13 - 22. We will stay on the sidelines for now.
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