MARKETS UPDATE (11:30 pm EST)
There are currently two possible ways to label the current medium-term cycles of the DOW and S&P 500:
1) They may have began with their lows on Nov. 4 (41,647 in the DOW and 5,696 in the S&P 500) or
2) They could have started with their more recent lows on January 13 (41,844 in the DOW and 5,774 in the S&P 500).
Regardless of which labeling is correct, it seems like significant tops have formed in all three of our market indices (DOW, S&P 500, and NASDAQ) all inside our recent strong general reversal zone (Jan. 22 - 31). Furthermore, all three indices have made "double-top" formations with only one index (the S&P 500) hitting a new all-time high without its two companions (bearish divergence). This is a strongly bearish picture and suggests a significant correction down is in progress. We will not enter another reversal zone until the first week of March, so this market has plenty of time to fall before hitting a significant bottom and turning back up again. Any correction now that goes below the Jan. 13 lows and especially the Nov. 4 lows mentioned above would be a VERY bearish signal that would indicate a serious correction is underway. I am staying on the sidelines of the broad stock market for now.
Gold made a new all-time high today at $2828. This high is two days out of our reversal zone for the precious metals but still within a potential "pivot point" range for gold. A downturn could (should) happen now, and if it does, we will be watching for a corrective low to test the 15-day and/or 45-day moving average that may be a good spot to buy.
It's still not clear if silver started a new medium-term cycle with the double-bottom lows of Nov.14 and Nov. 28 or the double-bottom lows of Dec. 19 and Dec. 31. In the former case, the cycle has already turned bearish because prices have gone below the start of the cycle. A break and close above $32.31 would make the second scenario more likely. Prices are staying under last Thursday's isolated high ($31.71) which was made on the last day of the reversal zone for precious metals. A downturn could be imminent. The depth of any correction will help us define the proper labeling of the cycle.
We are staying on the sidelines of both gold and silver for now.
Crude oil prices seem to be finding support around $72 near the 45-day moving average. We are at the center of a reversal zone specifically for crude (Jan. 28 - Feb. 6), so this is a good time for a reversal back up, although we could see a lower low between now and Thursday. I am still holding my long position in crude for now.
There are currently two possible ways to label the current medium-term cycles of the DOW and S&P 500:
1) They may have began with their lows on Nov. 4 (41,647 in the DOW and 5,696 in the S&P 500) or
2) They could have started with their more recent lows on January 13 (41,844 in the DOW and 5,774 in the S&P 500).
Regardless of which labeling is correct, it seems like significant tops have formed in all three of our market indices (DOW, S&P 500, and NASDAQ) all inside our recent strong general reversal zone (Jan. 22 - 31). Furthermore, all three indices have made "double-top" formations with only one index (the S&P 500) hitting a new all-time high without its two companions (bearish divergence). This is a strongly bearish picture and suggests a significant correction down is in progress. We will not enter another reversal zone until the first week of March, so this market has plenty of time to fall before hitting a significant bottom and turning back up again. Any correction now that goes below the Jan. 13 lows and especially the Nov. 4 lows mentioned above would be a VERY bearish signal that would indicate a serious correction is underway. I am staying on the sidelines of the broad stock market for now.
Gold made a new all-time high today at $2828. This high is two days out of our reversal zone for the precious metals but still within a potential "pivot point" range for gold. A downturn could (should) happen now, and if it does, we will be watching for a corrective low to test the 15-day and/or 45-day moving average that may be a good spot to buy.
It's still not clear if silver started a new medium-term cycle with the double-bottom lows of Nov.14 and Nov. 28 or the double-bottom lows of Dec. 19 and Dec. 31. In the former case, the cycle has already turned bearish because prices have gone below the start of the cycle. A break and close above $32.31 would make the second scenario more likely. Prices are staying under last Thursday's isolated high ($31.71) which was made on the last day of the reversal zone for precious metals. A downturn could be imminent. The depth of any correction will help us define the proper labeling of the cycle.
We are staying on the sidelines of both gold and silver for now.
Crude oil prices seem to be finding support around $72 near the 45-day moving average. We are at the center of a reversal zone specifically for crude (Jan. 28 - Feb. 6), so this is a good time for a reversal back up, although we could see a lower low between now and Thursday. I am still holding my long position in crude for now.
RSS Feed