MARKETS UPDATE (10:00 pm EDST)
The broad stock market continues to be amazingly buoyant and seems reluctant to take any serious corrections even though a significant corrective drop is now due (overdue) in all three market indices (DOW, S&P 500, NASDAQ). The current medium-term cycles for these three indices are very old and due for a 2-5 week corrective drop down to their final cycle bottoms. The DOW's last high was on Feb. 23 (39,282), and it fell from there to make an isolated low almost two weeks later on March 5 (38,457). There's a slight possibility of that low being the end of the old medium-term cycle and the start of a new one, but if so, this index should be very bullish now, which doesn't seem to be the case. Furthermore, both the S&P 500's and NASDAQ's last highs were on March 8 - only one week ago - and we expect at least two weeks for a final correction to a medium-term cycle bottom.
For now, let's stick with the idea that the final highs are in and a corrective fall is in progress. If instead these indices push to new highs this week, we will expect those highs to be the final cycle tops with a reversal to follow because our current strong reversal zone (March 14 - 22) ends on Friday (and we won't see another until the last week of April). We are still on the sidelines of the broad stock market.
Both gold and silver started new medium-term cycles on Feb. 14 (Valentine's Day - easy to remember) and both metals have been rallying strongly from there. But both are now due for their first sub-cycle corrections. A typical sub-cycle correction would see a 3 -8 day pullback, and we would like to see it test the 15-day moving average. Gold has now fallen 6 days from an isolated high ($2193) on March 8, and it is approaching its 15-day moving average. Tomorrow is the dead center of our current general reversal zone, and Tuesday through Thursday could be a potential "pivot point" for both gold and silver. Let's look for a spot to buy gold over the next few days. We remain on the sidelines of gold today.
Silver's last isolated high ($25.41) was just last Friday, and today prices are down a bit from there. We may see more pullback over the next several days to test the 15-day moving average (now around $24 and rising steeply), but then we expect prices to resume their rally back up. We are currently long in silver with a good profit (we bought silver on March 1). Let's hold our long position for now and ride out any corrective dips this week. If prices do test the 15-day moving average this week, it could be another opportunity to buy if not already long.
Crude oil may have made a significant sub-cycle low last Monday at $76.79 (April contract chart), which was inside a reversal zone for crude (Feb. 21 - March 13). But crude is now making a new weekly high inside our current general reversal zone (March 14 - 22) as it tests strong resistance between $82 - $84. A reversal and another sub-cycle low could be imminent. We missed buying last week's correction, so we'll have to wait for the next one.
One concern with crude that we've had over the last month or two has been identifying the bottom of a longer-term
4 year cycle in crude. The end of that cycle could have been the low of $68.57 on Dec. 13, 2023, but we haven't been sure of that. If the end of that cycle is still coming, we could see crude prices dropping back towards $60 sometime over the next 7 weeks. A clear break and close above $82 would imply that Dec. 13 was the 4 year low. That may be happening now. If this is the case, crude oil's trend now would be very bullish. We will stay on the sidelines for now as we wait to buy at the bottom of the next significant sub-cycle correction. This could at the end of an older 4 year cycle near $60 sometime over the next 7 weeks, or somewhere considerably higher than $60 if the 4 year cycle bottomed last December. Either way, we're still expecting a strong rally by crude into the end of this year.
The broad stock market continues to be amazingly buoyant and seems reluctant to take any serious corrections even though a significant corrective drop is now due (overdue) in all three market indices (DOW, S&P 500, NASDAQ). The current medium-term cycles for these three indices are very old and due for a 2-5 week corrective drop down to their final cycle bottoms. The DOW's last high was on Feb. 23 (39,282), and it fell from there to make an isolated low almost two weeks later on March 5 (38,457). There's a slight possibility of that low being the end of the old medium-term cycle and the start of a new one, but if so, this index should be very bullish now, which doesn't seem to be the case. Furthermore, both the S&P 500's and NASDAQ's last highs were on March 8 - only one week ago - and we expect at least two weeks for a final correction to a medium-term cycle bottom.
For now, let's stick with the idea that the final highs are in and a corrective fall is in progress. If instead these indices push to new highs this week, we will expect those highs to be the final cycle tops with a reversal to follow because our current strong reversal zone (March 14 - 22) ends on Friday (and we won't see another until the last week of April). We are still on the sidelines of the broad stock market.
Both gold and silver started new medium-term cycles on Feb. 14 (Valentine's Day - easy to remember) and both metals have been rallying strongly from there. But both are now due for their first sub-cycle corrections. A typical sub-cycle correction would see a 3 -8 day pullback, and we would like to see it test the 15-day moving average. Gold has now fallen 6 days from an isolated high ($2193) on March 8, and it is approaching its 15-day moving average. Tomorrow is the dead center of our current general reversal zone, and Tuesday through Thursday could be a potential "pivot point" for both gold and silver. Let's look for a spot to buy gold over the next few days. We remain on the sidelines of gold today.
Silver's last isolated high ($25.41) was just last Friday, and today prices are down a bit from there. We may see more pullback over the next several days to test the 15-day moving average (now around $24 and rising steeply), but then we expect prices to resume their rally back up. We are currently long in silver with a good profit (we bought silver on March 1). Let's hold our long position for now and ride out any corrective dips this week. If prices do test the 15-day moving average this week, it could be another opportunity to buy if not already long.
Crude oil may have made a significant sub-cycle low last Monday at $76.79 (April contract chart), which was inside a reversal zone for crude (Feb. 21 - March 13). But crude is now making a new weekly high inside our current general reversal zone (March 14 - 22) as it tests strong resistance between $82 - $84. A reversal and another sub-cycle low could be imminent. We missed buying last week's correction, so we'll have to wait for the next one.
One concern with crude that we've had over the last month or two has been identifying the bottom of a longer-term
4 year cycle in crude. The end of that cycle could have been the low of $68.57 on Dec. 13, 2023, but we haven't been sure of that. If the end of that cycle is still coming, we could see crude prices dropping back towards $60 sometime over the next 7 weeks. A clear break and close above $82 would imply that Dec. 13 was the 4 year low. That may be happening now. If this is the case, crude oil's trend now would be very bullish. We will stay on the sidelines for now as we wait to buy at the bottom of the next significant sub-cycle correction. This could at the end of an older 4 year cycle near $60 sometime over the next 7 weeks, or somewhere considerably higher than $60 if the 4 year cycle bottomed last December. Either way, we're still expecting a strong rally by crude into the end of this year.
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