We are now past that time period for a likely turning point in all markets and the next one will not be until the end of this month and early April.
In the broad stock market the DOW made a top on Friday that did not exceed its all-time high of 16,588 from Dec. 31 while the S&P 500 and NASDAQ continued to exceed their Dec. 31st highs. Thus this intermarket bearish divergence signal continues in these indices. The DOW is down today so a significant correction may be starting.
There are, however, several technical signals that are now turning bullish and directional momentum remains strongly bullish in the S&P 500 and NASDAQ (it is still mixed bullish and bearish in the DOW). This may be telling us that any correction will be brief and small. In fact, it is possible that last Monday's plunge to 16,071 could have been the correction already. If so, the DOW should soon exceed that 16,588 high and affirm its bullishness. Many investors have been and will be putting a lot of money into retirement accounts through early April (for tax reasons). This is a bullish factor that could be giving buoyancy to the markets right now. The thing to watch now is how the DOW moves this week. If it moves back down towards last Monday's low but does not break below it, this could be a good entry point to go long. Any break above 16,588 would also be a bullish sign and could be a signal to go long. Should the DOW break below the 16,000 area, it would be a bearish sign and would suggest a more severe correction in the market. We will wait and see what happens as the week unfolds. Still on the sidelines.
My feeling of more downside in gold and silver prices is being confirmed by several technical signals today, most significantly by a major bearish momentum signal appearing in the silver charts. Silver prices are approaching our ideal buying area near $20, but gold is still a good distance away from its ideal buy spot near $1280. This market could be volatile this week and may be affected strongly by any growing tensions between Russia and Ukraine. More conflict between these two countries could kick start an explosive rally in precious metals and bypass any normal corrections. Today's bearish change in directional momentum in silver, however, is enough to keep me on the sidelines for another day. On the sidelines and waiting to buy.
Crude oil's dramatic plunge last week to just above $100 on Wednesday and its subsequent rise back towards $103
on Friday was suggestive of a completed correction in this market. It may not be over, though, as prices plummeted again today and closed the day just above $101. Based on cycle studies, I would like to see this correction move closer to $98 before considering a long position. Any move now below $100 would suggest this is happening, but if that $100 level holds, it is possible for crude prices to rally and make a new high before any serious correction. Directional momentum in this market is still strongly bullish and as long as it remains so I will continue to wait for a good entry point to go long in crude oil. On the sidelines for now.