MARKETS UPDATE (11:30 pm EDT)
In last Monday's blog on the broad stock market I suggested it was likely a new medium-term cycle had started in this market, and maybe even a 3-year longer-term cycle as well. I also wrote:
"If that's the case, we should be seeing their [DOW, S&P 500, NASDAQ] all-time highs being tested and possibly exceeded soon. Nevertheless, we are already four weeks into the cycle, so a sub-cycle peak and correction could be imminent. If this cycle is super bullish, we may not see a top until we enter the next strong reversal zone (May 16 - 26),"
Well, here we are approaching the center of this strong reversal zone, and all three indices are rallying to new highs. A correction could (should) be imminent. If the trend is to remain bullish (likely), then we should see a modest correction down to at least test the 15-day and possibly the 45-day moving averages. If the correction stays in that range, it may be a good spot to buy. For now, we remain on the sidelines of this market.
Gold prices made an isolated low last week just outside the May 16 - 26 reversal zone (which applies to the precious metals), but the rally from there has been weak. If prices fall to a new low this week closer to $3100 inside this current reversal zone, I will take profits in my short gold position. If they edge up, however, we could instead see an isolated high (top) and another reversal back down to new lows. I am currently holding my short position in gold.
Silver prices have been staying within a narrow range ($32 - $33) for the last two weeks. The isolated low on May 1 ($31.68) was too early for a sub-cycle correction (following the rally off the deep $27.54 low of April 7). I suspect prices will fall lower this week. I am staying on the sidelines of silver for now.
Crude oil's medium-term cycle could have started with the March 5 isolated low at $64.16 (July contract chart). If that's the case, the cycle has turned bearish (as prices have already fallen below the starting price), and we expect prices to head lower towards the $52 area. A less likely possibility is the start of a new medium-term cycle from the $54.33 low on April 9. With that labeling, this market could see some more rallying. My guess is the former and that prices will go lower. An isolated high in this week's reversal zone could be a top from which prices will fall. I am remaining on the sidelines of crude for now.
In last Monday's blog on the broad stock market I suggested it was likely a new medium-term cycle had started in this market, and maybe even a 3-year longer-term cycle as well. I also wrote:
"If that's the case, we should be seeing their [DOW, S&P 500, NASDAQ] all-time highs being tested and possibly exceeded soon. Nevertheless, we are already four weeks into the cycle, so a sub-cycle peak and correction could be imminent. If this cycle is super bullish, we may not see a top until we enter the next strong reversal zone (May 16 - 26),"
Well, here we are approaching the center of this strong reversal zone, and all three indices are rallying to new highs. A correction could (should) be imminent. If the trend is to remain bullish (likely), then we should see a modest correction down to at least test the 15-day and possibly the 45-day moving averages. If the correction stays in that range, it may be a good spot to buy. For now, we remain on the sidelines of this market.
Gold prices made an isolated low last week just outside the May 16 - 26 reversal zone (which applies to the precious metals), but the rally from there has been weak. If prices fall to a new low this week closer to $3100 inside this current reversal zone, I will take profits in my short gold position. If they edge up, however, we could instead see an isolated high (top) and another reversal back down to new lows. I am currently holding my short position in gold.
Silver prices have been staying within a narrow range ($32 - $33) for the last two weeks. The isolated low on May 1 ($31.68) was too early for a sub-cycle correction (following the rally off the deep $27.54 low of April 7). I suspect prices will fall lower this week. I am staying on the sidelines of silver for now.
Crude oil's medium-term cycle could have started with the March 5 isolated low at $64.16 (July contract chart). If that's the case, the cycle has turned bearish (as prices have already fallen below the starting price), and we expect prices to head lower towards the $52 area. A less likely possibility is the start of a new medium-term cycle from the $54.33 low on April 9. With that labeling, this market could see some more rallying. My guess is the former and that prices will go lower. An isolated high in this week's reversal zone could be a top from which prices will fall. I am remaining on the sidelines of crude for now.
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