BROAD STOCK MARKET TRADE ALERT and PRECIOUS METALS UPDATE (2:30 pm EDST)
We are now out of our strong general reversal zone (March 13 - 23), and the recent lows in the DOW and S&P 500 on March 15 (DOW at 31,430) and March 13 (S&P 500 at 3,809), both of which were in the reversal zone, have held. Furthermore, the DOW and S&P 500 are now moving above their 15-day moving averages. This strongly suggests that these two indices started new medium-term cycles from those lows (especially since the end of the previous cycles were due that week of March 13). All new cycles are bullish in their early phase, so we are going to enter a long position in the broad stock market today. The DOW could rally now to challenge its Dec 13 high of 34,712, and the S&P 500 could retest its Feb. 2 high of 4,195. Our stop loss for this trade can be based on a close below those March 13 and 15 lows.
It's important to note that we expect any rally from here to be the last thrust up in the broad stock market before a longer-term correction resumes with equity markets expected to fall sharply, possibly to the final bottom of a long-term 90 year cycle over the next year or two AT LEAST 50% from the all-time highs (those highs were 36,953 for the DOW and 4,819 for the S&P 500 - both achieved in January 2022). We don't expect any rallies now to break those all-time highs. If BOTH indices do break those highs, we may have to abandon this idea of a major "crash" and assume the market is going to be bullish for many more years. I don't think that's going to happen, so until those all-time highs are breached, we will be on the lookout to sell short at the top of these new medium-term cycles.
Gold is at a major crossroads right now that could determine whether or not a long-term 23-year cycle is in it's final phase of a sharp correction down to its final bottom or if a new 23-year cycle has already begun from the recent "double-bottom" lows of $1616 on Sept. 28, 2022 and $1617 on Nov. 3, 2022. Last week gold was challenging the strong resistance line around $2000. Any close above $2000 would mean the that the "double-top" highs of $2070 from Aug. 2020 and $2066 from March 2022 are being tested. A potential "triple-top" to an older 23-year cycle is possible here, but if those double-top highs are exceeded, it would likely indicate that a new 23-year cycle has begun.
It is still early in gold's current medium--term cycle (5th week), but the 5th week means that gold is now due for a possible sub-cycle correction. Last Friday's high ($2007) could have been a top as it was at the end of two strong reversal zones. We are out of those reversal zones this week, but there are potentially strong "pivot points" for a reversal in both gold and silver from today through Thursday. The bottom line here is that we would like to see gold prices fall now to confirm that an older 23-year cycle is still in progress and taking its final steep correction down (possibly to the $1000 level by next year). But if prices start closing above $2000, and especially above $2070, we will have to give up that idea and assume a new 23-year cycle is underway.
As I wrote in in last Tuesday's blog:
"Our decision to short gold yesterday seems to have been a good one as prices dropped sharply today. Our view of gold is now bearish, but prices have to drop below $1807 to confirm this and to confirm that the current medium-term cycle has just peaked. If it hasn't peaked, that $1807 low will hold and gold prices may move higher to challenge the all-time highs at $2066 and $2070. If those highs are exceeded, it would mean that a new 23 year cycle has already started, and that would be VERY bullish (see earlier blogs on gold)."
Today's price drop is encouraging, but we have to be ready to cover our short position if prices start closing above $2000. For now, we will remain short in gold.
Silver prices have pushed higher than we expected from the $19.91 low on March 10. That low was most likely the start of a new medium-term cycle. As with gold, last Friday's high may be some sort of a top (or we could get another this week), and a sub-cycle correction could be imminent. If silver takes a modest correction now and stays above $19.91, we may look to buy again as silver still has the potential to rally higher (possibly as high as $30). We will remain on the sidelines for now.
We are now out of our strong general reversal zone (March 13 - 23), and the recent lows in the DOW and S&P 500 on March 15 (DOW at 31,430) and March 13 (S&P 500 at 3,809), both of which were in the reversal zone, have held. Furthermore, the DOW and S&P 500 are now moving above their 15-day moving averages. This strongly suggests that these two indices started new medium-term cycles from those lows (especially since the end of the previous cycles were due that week of March 13). All new cycles are bullish in their early phase, so we are going to enter a long position in the broad stock market today. The DOW could rally now to challenge its Dec 13 high of 34,712, and the S&P 500 could retest its Feb. 2 high of 4,195. Our stop loss for this trade can be based on a close below those March 13 and 15 lows.
It's important to note that we expect any rally from here to be the last thrust up in the broad stock market before a longer-term correction resumes with equity markets expected to fall sharply, possibly to the final bottom of a long-term 90 year cycle over the next year or two AT LEAST 50% from the all-time highs (those highs were 36,953 for the DOW and 4,819 for the S&P 500 - both achieved in January 2022). We don't expect any rallies now to break those all-time highs. If BOTH indices do break those highs, we may have to abandon this idea of a major "crash" and assume the market is going to be bullish for many more years. I don't think that's going to happen, so until those all-time highs are breached, we will be on the lookout to sell short at the top of these new medium-term cycles.
Gold is at a major crossroads right now that could determine whether or not a long-term 23-year cycle is in it's final phase of a sharp correction down to its final bottom or if a new 23-year cycle has already begun from the recent "double-bottom" lows of $1616 on Sept. 28, 2022 and $1617 on Nov. 3, 2022. Last week gold was challenging the strong resistance line around $2000. Any close above $2000 would mean the that the "double-top" highs of $2070 from Aug. 2020 and $2066 from March 2022 are being tested. A potential "triple-top" to an older 23-year cycle is possible here, but if those double-top highs are exceeded, it would likely indicate that a new 23-year cycle has begun.
It is still early in gold's current medium--term cycle (5th week), but the 5th week means that gold is now due for a possible sub-cycle correction. Last Friday's high ($2007) could have been a top as it was at the end of two strong reversal zones. We are out of those reversal zones this week, but there are potentially strong "pivot points" for a reversal in both gold and silver from today through Thursday. The bottom line here is that we would like to see gold prices fall now to confirm that an older 23-year cycle is still in progress and taking its final steep correction down (possibly to the $1000 level by next year). But if prices start closing above $2000, and especially above $2070, we will have to give up that idea and assume a new 23-year cycle is underway.
As I wrote in in last Tuesday's blog:
"Our decision to short gold yesterday seems to have been a good one as prices dropped sharply today. Our view of gold is now bearish, but prices have to drop below $1807 to confirm this and to confirm that the current medium-term cycle has just peaked. If it hasn't peaked, that $1807 low will hold and gold prices may move higher to challenge the all-time highs at $2066 and $2070. If those highs are exceeded, it would mean that a new 23 year cycle has already started, and that would be VERY bullish (see earlier blogs on gold)."
Today's price drop is encouraging, but we have to be ready to cover our short position if prices start closing above $2000. For now, we will remain short in gold.
Silver prices have pushed higher than we expected from the $19.91 low on March 10. That low was most likely the start of a new medium-term cycle. As with gold, last Friday's high may be some sort of a top (or we could get another this week), and a sub-cycle correction could be imminent. If silver takes a modest correction now and stays above $19.91, we may look to buy again as silver still has the potential to rally higher (possibly as high as $30). We will remain on the sidelines for now.
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