MARKETS UPDATE (10:00 pm EST)
Last week's equity rally into the U.S. Thanksgiving holiday may be the first leg up in a broader "Santa Claus" rally that sometimes propels the broad stock market with holiday cheer up into Christmas and New Year's Day. Will it happen this year? It is still early in the current medium-term cycles of the DOW, S&P 500, and NASDAQ (which started with their Oct. 26-27 lows), and it's likely a longer-term (50 week) cycle also started from those lows. This means there's a good chance this market will be bullish into the new year.
Right now, however, a possible sub-cycle corrective dip could be imminent. Today the DOW made a new weekly high, but the S&P 500 and NASDAQ did not (intermarket bearish divergence), and all three indices closed with losses. A corrective dip could be starting. In a bullish market, a normal sub-cycle correction would at least test the 15-day moving average (now around 13,972 in the DOW and 4,472 in the S&P 500, both rising). We may look to buy if these indices test or push a bit below these levels this week or next. If instead equity markets continue to push higher, we may have to wait a little longer for a significant sub-cycle correction. The next strong general reversal zone is coming up Dec.12 - 21. It's too early to tell if that will correspond to a high or low, but we will trade accordingly. We are remaining on the sidelines of the broad stock market for now.
Gold prices jumped up today and closed at $2014. This is above the Oct. 27 peak of $2009 and likely confirms the current medium-term cycle trend as bullish. We will thus stay long in our gold position and try to ride out any corrective dips (unless they go too low). Silver prices also shot up today, but they are now approaching a strong resistance area near $25. Furthermore, silver is now entering a strong potential "pivot point" time frame between today and Wednesday, so a top and corrective drop could be imminent, and it may be quite steep. If we get this, we will look at it as an opportunity to buy, as long as prices hold above $21. We remain on the sidelines of silver for now.
Last week crude oil prices tested the 15-day moving average but failed to break through. Today crude closed well below that average and near $75 (Jan. 2024 contract chart). As I have mentioned in previous blogs, crude's current medium-term cycle has most likely turned bearish, and prices should push lower until the end of the cycle. There's a possibility the old cycle ended and a new one began with the Nov. 16 low at $72.37. If so, prices shouldn't go below that low and should rally now. If not, prices should continue to fall lower, perhaps after a brief bounce back up to test the 15-day and 45-day moving averages. There is a reversal zone specifically for crude coming up Dec. 5 - 13. We will have to wait and see if that is going to be a low or high. If a low, it may correspond to a final cycle bottom and a good buying opportunity. For now, we remain on the sidelines of crude.
Last week's equity rally into the U.S. Thanksgiving holiday may be the first leg up in a broader "Santa Claus" rally that sometimes propels the broad stock market with holiday cheer up into Christmas and New Year's Day. Will it happen this year? It is still early in the current medium-term cycles of the DOW, S&P 500, and NASDAQ (which started with their Oct. 26-27 lows), and it's likely a longer-term (50 week) cycle also started from those lows. This means there's a good chance this market will be bullish into the new year.
Right now, however, a possible sub-cycle corrective dip could be imminent. Today the DOW made a new weekly high, but the S&P 500 and NASDAQ did not (intermarket bearish divergence), and all three indices closed with losses. A corrective dip could be starting. In a bullish market, a normal sub-cycle correction would at least test the 15-day moving average (now around 13,972 in the DOW and 4,472 in the S&P 500, both rising). We may look to buy if these indices test or push a bit below these levels this week or next. If instead equity markets continue to push higher, we may have to wait a little longer for a significant sub-cycle correction. The next strong general reversal zone is coming up Dec.12 - 21. It's too early to tell if that will correspond to a high or low, but we will trade accordingly. We are remaining on the sidelines of the broad stock market for now.
Gold prices jumped up today and closed at $2014. This is above the Oct. 27 peak of $2009 and likely confirms the current medium-term cycle trend as bullish. We will thus stay long in our gold position and try to ride out any corrective dips (unless they go too low). Silver prices also shot up today, but they are now approaching a strong resistance area near $25. Furthermore, silver is now entering a strong potential "pivot point" time frame between today and Wednesday, so a top and corrective drop could be imminent, and it may be quite steep. If we get this, we will look at it as an opportunity to buy, as long as prices hold above $21. We remain on the sidelines of silver for now.
Last week crude oil prices tested the 15-day moving average but failed to break through. Today crude closed well below that average and near $75 (Jan. 2024 contract chart). As I have mentioned in previous blogs, crude's current medium-term cycle has most likely turned bearish, and prices should push lower until the end of the cycle. There's a possibility the old cycle ended and a new one began with the Nov. 16 low at $72.37. If so, prices shouldn't go below that low and should rally now. If not, prices should continue to fall lower, perhaps after a brief bounce back up to test the 15-day and 45-day moving averages. There is a reversal zone specifically for crude coming up Dec. 5 - 13. We will have to wait and see if that is going to be a low or high. If a low, it may correspond to a final cycle bottom and a good buying opportunity. For now, we remain on the sidelines of crude.
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