MARKETS UPDATE (5:00 pm EDST)
Today is technically the last day of our reversal zone for equities. All three indices (DOW, S&P 500, and NASDAQ are making new lows but are also closing up from those lows. There is a chance the DOW is making a sub-cycle low here and could start another rally to new highs, but it is too late in the cycles of the S&P 500 and NASDAQ for such a sub-cycle dip so this is not being supported by those indices. It is more likely all three indices are headed lower over the next few weeks to their final medium-term cycle bottoms. We will keep our eyes open for the bullish possibility, however, and will be ready to cover our short position in this market if necessary. Holding my short position in the broad stock market for now.
I recently commented on the possibility of powerful "anti-Trump" groups manipulating the markets and creating a deep stock market correction to help the Democrats in the upcoming mid-term elections in the first week of November. I should also say that there could be powerful Republican groups working hard to keep equity markets buoyant at least through that election week. If this is the case, we could see a lot of market volatility over the next several weeks as both groups battle it out. Because the broad stock market is extremely overbought and the cycle picture is pointing to an imminent steep correction, odds favor the "anti-Trumpers" getting their way. Nevertheless, we cannot not rule out the possibility of more "Trumphoria" energy pushing this market higher into election week. If that does happen, we can expect a steep correction soon after the election as the final cycle bottoms will be due.
On Friday I wrote on the precious metals:
"Gold and silver prices seem to be stuck in neutral at the moment with the potential to either rally or take another correction. Both metals made new highs in this week's reversal zone and could still fall to new lows by next Wednesday. That could set up an ideal buying spot."
Both metals fell sharply today to new weekly lows, but because it was both metals, we don't have a bullish divergence signal. Let's see if prices move lower tomorrow and Wednesday. It is possible a strong rally could start from a low by Wednesday, but lower prices past Wednesday would probably negate that scenario. If gold breaks below $1161 and silver breaks below $13.95, this market's short and medium-term trend could turn very bearish. On the sidelines of gold and silver.
Crude oil's situation is the same as the DOW's right now. A sub-cycle low could be forming today from which we could get a rally to new highs shortly. I think it's more likely, however, that last Wednesday's high at $76.90 was the cycle top, and the final correction has started. Let's see how prices move as we leave the current reversal zone that ends today. Staying on the sidelines of crude for now.
Today is technically the last day of our reversal zone for equities. All three indices (DOW, S&P 500, and NASDAQ are making new lows but are also closing up from those lows. There is a chance the DOW is making a sub-cycle low here and could start another rally to new highs, but it is too late in the cycles of the S&P 500 and NASDAQ for such a sub-cycle dip so this is not being supported by those indices. It is more likely all three indices are headed lower over the next few weeks to their final medium-term cycle bottoms. We will keep our eyes open for the bullish possibility, however, and will be ready to cover our short position in this market if necessary. Holding my short position in the broad stock market for now.
I recently commented on the possibility of powerful "anti-Trump" groups manipulating the markets and creating a deep stock market correction to help the Democrats in the upcoming mid-term elections in the first week of November. I should also say that there could be powerful Republican groups working hard to keep equity markets buoyant at least through that election week. If this is the case, we could see a lot of market volatility over the next several weeks as both groups battle it out. Because the broad stock market is extremely overbought and the cycle picture is pointing to an imminent steep correction, odds favor the "anti-Trumpers" getting their way. Nevertheless, we cannot not rule out the possibility of more "Trumphoria" energy pushing this market higher into election week. If that does happen, we can expect a steep correction soon after the election as the final cycle bottoms will be due.
On Friday I wrote on the precious metals:
"Gold and silver prices seem to be stuck in neutral at the moment with the potential to either rally or take another correction. Both metals made new highs in this week's reversal zone and could still fall to new lows by next Wednesday. That could set up an ideal buying spot."
Both metals fell sharply today to new weekly lows, but because it was both metals, we don't have a bullish divergence signal. Let's see if prices move lower tomorrow and Wednesday. It is possible a strong rally could start from a low by Wednesday, but lower prices past Wednesday would probably negate that scenario. If gold breaks below $1161 and silver breaks below $13.95, this market's short and medium-term trend could turn very bearish. On the sidelines of gold and silver.
Crude oil's situation is the same as the DOW's right now. A sub-cycle low could be forming today from which we could get a rally to new highs shortly. I think it's more likely, however, that last Wednesday's high at $76.90 was the cycle top, and the final correction has started. Let's see how prices move as we leave the current reversal zone that ends today. Staying on the sidelines of crude for now.
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