GOLD TRADE ALERT and BROAD STOCK MARKET UPDATE (3:00 pm EST)
Gold and silver prices are dropping down again as we enter the center of our reversal zone for precious metals (Feb. 27 - March 8). If last Thursday's lows were not the bottom, we could see that this week either in both metals or ideally in one and not the other (bullish divergence). I am going to go long today in gold and hold off buying silver with the idea that we could still see that bullish divergence signal over the next few days and buy then. We can set a close stop loss for this gold trade on a close below $1300.
The broad stock market continues to amaze us with its rash and unpredictable behavior. Much of this these days can undoubtedly be attributed to some rash and unpredictable policies from the Trump administration (e.g. last week's announcement of increasing tariffs on imported aluminum and steel and the possibility of this leading to "trade wars"). Mr. Trump is certainly shaking things up (as he promised in his campaign) - for better or for worse. Today's strong rally in equities is prompting me to add a third scenario to Friday's list of possible trajectories for this market. This would have the market make a shallow corrective dip without making a double bottom to the lows from Feb. 9 and then rally to new highs - i.e. very bullish. It is too early to determine if that is happening, and because the current reversal zone extends into March 13, there is still plenty of time for a double bottom. We will have to wait and see if today's rally can gain some legs. Still on the sidelines here.
Gold and silver prices are dropping down again as we enter the center of our reversal zone for precious metals (Feb. 27 - March 8). If last Thursday's lows were not the bottom, we could see that this week either in both metals or ideally in one and not the other (bullish divergence). I am going to go long today in gold and hold off buying silver with the idea that we could still see that bullish divergence signal over the next few days and buy then. We can set a close stop loss for this gold trade on a close below $1300.
The broad stock market continues to amaze us with its rash and unpredictable behavior. Much of this these days can undoubtedly be attributed to some rash and unpredictable policies from the Trump administration (e.g. last week's announcement of increasing tariffs on imported aluminum and steel and the possibility of this leading to "trade wars"). Mr. Trump is certainly shaking things up (as he promised in his campaign) - for better or for worse. Today's strong rally in equities is prompting me to add a third scenario to Friday's list of possible trajectories for this market. This would have the market make a shallow corrective dip without making a double bottom to the lows from Feb. 9 and then rally to new highs - i.e. very bullish. It is too early to determine if that is happening, and because the current reversal zone extends into March 13, there is still plenty of time for a double bottom. We will have to wait and see if today's rally can gain some legs. Still on the sidelines here.
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