GOLD TRADE ALERT and MARKETS UPDATE (2:30 pm EST)
It looks like it is a good time to cover our long position in gold and start looking for a point to sell short the precious metals market. The charts for gold and silver mining company indices HUI and XAU continue to be strongly bearish which does not bode well for these metals short-term. Gold prices today are approaching resistance in the $1251 area, and we are in our original target zone for this rally so I am going to sell my gold long positions for a decent short-term profit and stand aside the precious metals for now. Technical and cycle data are suggesting a reversal soon in the precious metals that could take prices down to new lows (and possibly the long-term cycle bottoms in both gold and silver). We will now watch for signs of that reversal which could be sometime this week (possibly today if the market turns here and gives a short-term sell signal). If gold prices push higher into the week then Friday could end up being the turning point. Selling gold long positions today and standing aside the precious metals for now.
After a wild and extremely volatile week, the broad stock market closed last Friday with a strong rally, and the DOW surged up 263 points. Some investors were encouraged by this and are viewing Wednesday's low at 15,855 as the final bottom to this correction. Most of the analysts I follow, however, do not agree and are viewing the bounce from Wednesday as a short-term relief rally soon to be followed by new lows. Technical and cycle data are also supporting this bearish view. My trading strategy, therefore, continues to be bearish and we will try to sell short the top of this rally, maybe even this week. An ideal target in the DOW would be in the 16.500 - 16,800 range (in the S&P 500 it would be 1900 - 1930) preferably later in the week, but markets are still trading in a volatile environment so we may not see that ideal setup. In fact, the high may already be in with Friday's 16,427 DOW top. We will have to wait and see how the market moves over the next few days. On the sidelines but looking to sell short soon.
Crude oil prices seem to be holding above my final line in the sand support level at $79. As I discussed in my last blog, the current crude cycle may be distorting, but if the Oct.16 low ($79.78) turns out to be the final bottom to this correction, then we are on track with a new cycle and this would be bullish. Holding my long position in crude oil with a tight stop loss on a close below $79.
It looks like it is a good time to cover our long position in gold and start looking for a point to sell short the precious metals market. The charts for gold and silver mining company indices HUI and XAU continue to be strongly bearish which does not bode well for these metals short-term. Gold prices today are approaching resistance in the $1251 area, and we are in our original target zone for this rally so I am going to sell my gold long positions for a decent short-term profit and stand aside the precious metals for now. Technical and cycle data are suggesting a reversal soon in the precious metals that could take prices down to new lows (and possibly the long-term cycle bottoms in both gold and silver). We will now watch for signs of that reversal which could be sometime this week (possibly today if the market turns here and gives a short-term sell signal). If gold prices push higher into the week then Friday could end up being the turning point. Selling gold long positions today and standing aside the precious metals for now.
After a wild and extremely volatile week, the broad stock market closed last Friday with a strong rally, and the DOW surged up 263 points. Some investors were encouraged by this and are viewing Wednesday's low at 15,855 as the final bottom to this correction. Most of the analysts I follow, however, do not agree and are viewing the bounce from Wednesday as a short-term relief rally soon to be followed by new lows. Technical and cycle data are also supporting this bearish view. My trading strategy, therefore, continues to be bearish and we will try to sell short the top of this rally, maybe even this week. An ideal target in the DOW would be in the 16.500 - 16,800 range (in the S&P 500 it would be 1900 - 1930) preferably later in the week, but markets are still trading in a volatile environment so we may not see that ideal setup. In fact, the high may already be in with Friday's 16,427 DOW top. We will have to wait and see how the market moves over the next few days. On the sidelines but looking to sell short soon.
Crude oil prices seem to be holding above my final line in the sand support level at $79. As I discussed in my last blog, the current crude cycle may be distorting, but if the Oct.16 low ($79.78) turns out to be the final bottom to this correction, then we are on track with a new cycle and this would be bullish. Holding my long position in crude oil with a tight stop loss on a close below $79.
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