The Alternative Investor
  • Home
  • TRADING BLOG
  • Current Positions
  • Alternative Investor Strategy
  • ETFs
  • About Alternative Investor
  • Contact

Trading Blog          Monday,  May 18,  2015  

5/18/2015

 
MARKETS  UPDATE  (6:45 pm EDT)

The DOW finally broke above its all-time high (18,288) today which negates its intermarket bearish divergence with the S&P 500 and NASDAQ (they both made new all-time highs in late April). This is a bullish signal for these markets. There is the possibility now of the DOW rallying towards the 19,000 level, but we are now entering a four week reversal period when all markets can make significant reversals. That reversal window is especially strong 

May 25 - June 15 (i.e starting next week) and could turn down any rally. While it is tempting to go long now, there is still a short-term bearish divergence between the NASDAQ (which is below its April high of 5120) and the DOW and S&P 500 (which are both exceeding their April highs). Furthermore, there is now resistance for the DOW in the 18,400 area, and while it is possible for a rally to reach 19,000, a more likely target would be around 18,600. For all of these reasons, I am going to refrain from going long and will instead wait for the signs of a top to sell short. My rationale here is based on the fact that we are nearing the final peak of a major medium-term cycle in the broad stock market, and we are in a time frame (the next four weeks) when this is likely to happen. Yes, there is the possibility of a bullish surge to the final peak (even towards 19,000 in the DOW), but a smaller rally is more likely, and the corrective fall from the peak should be very significant. Likely turning points for reversals would be May 20-21, May 29 - June 1, and June 9-10. On the sidelines of the broad stock market market for now. 

The situation now in gold and silver is similar to that of the broad stock market. In my blog last Thursday I wrote: "Today gold made a significant break above its April 6th high of $1224 but closed the day below (at $1222). This is a bullish sign and gold could rally higher now; however, we need to keep in mind that the next two weeks are a major reversal zone for gold. This means we should be watching for a top to sell short in that time frame. If gold can close above $1224, it may get to the $1230 - $1250 area (or even higher) before turning down."  Well, today gold prices closed slightly above $1224 so we could be on our way to that $1230 - $1250 area. The end of this week, however, is an especially strong reversal period for gold (and silver), and there are also a few other short-term technical signals suggesting a significant reversal this week. I am therefore going to avoid going long now and wait for signs of a top and an imminent correction.  On the sidelines of gold and silver.

The U.S. Dollar Index seems to be finding some support at the 93 level, and several short-term technical signals are suggesting a bounce here. The dollar rallied today so that bounce may be starting now. If the rally gains some legs, it could be the thing that triggers a significant correction in the precious metals. We will have to wait and see.

Crude oil continues to stay below its $62.58 high of May 6 and still appears to be headed to a low in the $52 - $55 area. This could happen over the next few weeks as we are now in a reversal zone for crude oil too. If this low is achieved (and stays above $52), we will be looking to cover our current short position (take profits) and buy as long as the overall directional momentum remains bullish. Holding my short position in crude oil for now.





Comments are closed.

    RSS Feed

    Archives

    September 2023
    August 2023
    July 2023
    June 2023
    May 2023
    April 2023
    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012

The Alternative Investor takes no advertising or incentives from any company, institution or investment that is discussed on the website.  Any trading and investing information presented is based on Alternative Investor's independent and unbiased research and analysis of current financial markets.

                                                                                                                                                            LEGAL and DISCLAIMER

All statements and trading/investment information on this website represent solely the personal opinion of The Alternative Investor based on information available at the time of writing and are intended for educational purposes only and are not a recommendation to buy or sell securities, commodities or currencies.  The Alternative Investor is not a licensed broker or financial advisor.  The Alternative Investor presents the trading and investing information on this site in good faith based on his own research into current financial markets but cannot and does not guarantee profit and does not guarantee against any financial losses that result from using this information.  All users of this website and the information presented within it assume full responsibility for their own personal trading/investing decisions and any losses that may result from them.

Trading and investing in any financial market may involve serious risk of loss.  For this reason all traders and investors should never place more money than they can afford to lose in any individual market.  The Alternative Investor monitors several markets and encourages a balanced distribution of funds among them (and others).  The Alternative Investor recommends consulting with a professional financial advisor before making any transactions with financial ramifications.  All trading, investing and financial transactions should always be made in accordance with the appropriate laws and legal regulations in your area of jurisdiction.

The Alternative Investor is an independent researcher and analyst and receives no compensation of any kind from any individuals, groups, companies or institutions discussed on this website.