MARKETS UPDATE (6:30 pm EDST)
Financial markets were closed in the U.S. today because of the Labor Day holiday and will reopen tomorrow.
As I mentioned on Friday, SOME sort of correction in the broad stock market started in the second half of last week, but uncertainty in the medium-term cycle patterns of our three major market indices (DOW, S&P 500, NASDAQ) is keeping us from knowing if it is going to be a deep fall or just a corrective dip.
The DOW and S&P 500 are probably young cycles taking a modest sub-cycle dip. If so, they should find support early this week (or even with Friday's low) and rally again. The NASDAQ, in contrast, is most likely an older cycle that topped out last week (Wednesday), and a steep correction to its final cycle bottom could already be in progress. Even in that index, however, we may see a short bounce this week back towards last week's high (but not exceeding it) before resuming its fall to a cycle bottom. Our trading strategy here will be to watch for another rally this week and try to sell short at the top as long as ALL THREE indices do not make new all-time highs. A good top for the rally might be around 28,500 in the DOW and 3,500 in the S&P 500. The NASDAQ rally may be modest, and it shouldn't exceed last week's high of 12,074. If we don't see any rallying this week, we will have to abandon this strategy and reanalyze the cycle patterns. Staying on the sidelines of this market for now.
The medium-term cycles in gold and silver are still not clear. There is still a good chance for both these metals to fall lower in price before any substantial rally so we will remain on the sidelines for now. We are still looking to buy as the general trend n the precious metals is still quite bullish.
It appears that crude oil's high of $43.78 on Aug. 26 was the top of the current medium-term cycle, and crude is now falling to its final cycle bottom which may happen this week or next. Because this market dropped so dramatically and abruptly in April (distorting a normal cycle), it is hard to pick a good target for this bottom; however, prices should at least fall below $38. We will watch for signs of a bottom and a possible buying opportunity. There is a reversal zone specifically for crude oil Sept. 8 - 17 so that would be a good time for the final cycle bottom. Still on the sidelines of crude oil.
Financial markets were closed in the U.S. today because of the Labor Day holiday and will reopen tomorrow.
As I mentioned on Friday, SOME sort of correction in the broad stock market started in the second half of last week, but uncertainty in the medium-term cycle patterns of our three major market indices (DOW, S&P 500, NASDAQ) is keeping us from knowing if it is going to be a deep fall or just a corrective dip.
The DOW and S&P 500 are probably young cycles taking a modest sub-cycle dip. If so, they should find support early this week (or even with Friday's low) and rally again. The NASDAQ, in contrast, is most likely an older cycle that topped out last week (Wednesday), and a steep correction to its final cycle bottom could already be in progress. Even in that index, however, we may see a short bounce this week back towards last week's high (but not exceeding it) before resuming its fall to a cycle bottom. Our trading strategy here will be to watch for another rally this week and try to sell short at the top as long as ALL THREE indices do not make new all-time highs. A good top for the rally might be around 28,500 in the DOW and 3,500 in the S&P 500. The NASDAQ rally may be modest, and it shouldn't exceed last week's high of 12,074. If we don't see any rallying this week, we will have to abandon this strategy and reanalyze the cycle patterns. Staying on the sidelines of this market for now.
The medium-term cycles in gold and silver are still not clear. There is still a good chance for both these metals to fall lower in price before any substantial rally so we will remain on the sidelines for now. We are still looking to buy as the general trend n the precious metals is still quite bullish.
It appears that crude oil's high of $43.78 on Aug. 26 was the top of the current medium-term cycle, and crude is now falling to its final cycle bottom which may happen this week or next. Because this market dropped so dramatically and abruptly in April (distorting a normal cycle), it is hard to pick a good target for this bottom; however, prices should at least fall below $38. We will watch for signs of a bottom and a possible buying opportunity. There is a reversal zone specifically for crude oil Sept. 8 - 17 so that would be a good time for the final cycle bottom. Still on the sidelines of crude oil.
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