MARKETS UPDATE (6:15 pm EST)
The DOW, S&P 500 and NASDAQ all made new highs last Thursday and are looking "toppy", but they don't seem to be in any hurry to take a correction. In terms of timing, these indices still have the rest of this week to make new highs before turning down (unless Thursday's highs were it) so we will watch for a correction to start over the next several days with the expectation of a bottom possibly down to the 17,000 area in the DOW (and maybe the 1950 - 1960 area in the S&P 500). We now have a short position in the broad stock market with a tight stop loss on a close above 17,740 in the DOW. If this stop loss is triggered and these markets continue to rise past this week then it would mean a short-term cycle is being bypassed and we would then try to get long and look for the next longer term cycle top to sell short (probably in mid-December). But until that happens I am anticipating a correction to start this week (it may have already started) and a steep drop towards new weekly lows. Holding my short position in the broad stock market.
Gold prices are pushing into our resistance area of $1180 - $1210 and we are at the center of a timing zone for a likely reversal in precious metals, but there are some short-term technical indicators that are still quite bullish suggesting gold prices could push higher. There is also a chance (as I've discussed in recent blogs) of gold and silver "breaking out" now and turning bullish (the momentum trend is presently bearish) if prices can clear that resistance. For these reasons I am a little hesitant to sell short right now and will wait for a stronger sell signal to do so. This could happen over the next few days. Still on the sidelines and waiting to sell short.
The "distorted" cycle pattern interpretation of crude oil charts that I have been using for many weeks now is starting to look flawed, and there is an alternative interpretation that makes the recent price movements in this market more clear. It appears that we are in the middle of an older cycle in crude oil and not starting a new one as I had previously thought. This makes more sense because the momentum trend and technical signals in this market continue to be strongly bearish, whereas the start of a new cycle is usually very bullish. What this means is that we can now expect a short-term rally from a bottom that probably formed with last week's low at $73.25. If we get such a rally and it stalls in the $79 - $82 area, we will look to sell short a decline to more serious lows as this cycle is pointed down and should not bottom for at least four more weeks. Out of this market for now.
The DOW, S&P 500 and NASDAQ all made new highs last Thursday and are looking "toppy", but they don't seem to be in any hurry to take a correction. In terms of timing, these indices still have the rest of this week to make new highs before turning down (unless Thursday's highs were it) so we will watch for a correction to start over the next several days with the expectation of a bottom possibly down to the 17,000 area in the DOW (and maybe the 1950 - 1960 area in the S&P 500). We now have a short position in the broad stock market with a tight stop loss on a close above 17,740 in the DOW. If this stop loss is triggered and these markets continue to rise past this week then it would mean a short-term cycle is being bypassed and we would then try to get long and look for the next longer term cycle top to sell short (probably in mid-December). But until that happens I am anticipating a correction to start this week (it may have already started) and a steep drop towards new weekly lows. Holding my short position in the broad stock market.
Gold prices are pushing into our resistance area of $1180 - $1210 and we are at the center of a timing zone for a likely reversal in precious metals, but there are some short-term technical indicators that are still quite bullish suggesting gold prices could push higher. There is also a chance (as I've discussed in recent blogs) of gold and silver "breaking out" now and turning bullish (the momentum trend is presently bearish) if prices can clear that resistance. For these reasons I am a little hesitant to sell short right now and will wait for a stronger sell signal to do so. This could happen over the next few days. Still on the sidelines and waiting to sell short.
The "distorted" cycle pattern interpretation of crude oil charts that I have been using for many weeks now is starting to look flawed, and there is an alternative interpretation that makes the recent price movements in this market more clear. It appears that we are in the middle of an older cycle in crude oil and not starting a new one as I had previously thought. This makes more sense because the momentum trend and technical signals in this market continue to be strongly bearish, whereas the start of a new cycle is usually very bullish. What this means is that we can now expect a short-term rally from a bottom that probably formed with last week's low at $73.25. If we get such a rally and it stalls in the $79 - $82 area, we will look to sell short a decline to more serious lows as this cycle is pointed down and should not bottom for at least four more weeks. Out of this market for now.
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