MARKETS UPDATE (4:30 pm EDST)
Today the DOW and S&P 500 made new weekly highs early in the day but the NASDAQ did not; then all three indices turned down in the afternoon. We are thus starting the week with possible bearish divergence; however, all three indices snapped back significantly (especially the DOW) by the closing bell so it is not a very strong bearish signal. Let's stay on the sidelines for now and see if the broad stock market continues down tomorrow. It still has plenty of time to rally up and make a top in this week's reversal zone or in another (stronger) one next week. That is my preferred scenario to give us a potential high to sell short. But if this market turns down now, we could instead see a sharp fall and a possible cycle low to buy near the end of the month. The news and sentiment on the U.S./China "trade deal" will likely be a major factor in driving this market up or down over the next several weeks. New trade talks are tentatively scheduled for early next month. Hopeful anticipation could propel a rally until then, but if the talks don't produce much, equities could take a dive off that rally (or the market might just rally on the rumor - of a trade deal - and "sell on the news" even if the trade deal works out well, i.e. "buy the rumor, sell the news").
Gold and silver still seem to be headed down to their final medium-term cycle bottoms. Ideally, we would like to see this in the next reversal zone specifically for the precious metals (Sept. 13 - 27). Our target prices for a low are still around $1400 - $1450 in gold and $17 - $17.50 in silver. We will remain on the sidelines now as we watch for this buying opportunity in both metals.
Crude oil prices surged today and made a new monthly high at $55.07. We are, however, just entering a new reversal zone specifically for crude (Sept. 6 - 21) so we are anticipating a top either this week or next which will most likely be followed by a sharp correction to the final medium-term cycle bottom. If the current rally stays under the July 12 high of $60.76 (Oct. contract chart), the cycle will turn bearish and likely take a deep correction. But if this rally gains legs and can exceed $60.76, the cycle will be bullish and the correction down to the final cycle low may be modest. Let's stay on the sidelines in crude oil for now. As I've mentioned before, crude's behavior may mimic the broad stock market so we will keep a sharp eye on both markets as we move forward.
Today the DOW and S&P 500 made new weekly highs early in the day but the NASDAQ did not; then all three indices turned down in the afternoon. We are thus starting the week with possible bearish divergence; however, all three indices snapped back significantly (especially the DOW) by the closing bell so it is not a very strong bearish signal. Let's stay on the sidelines for now and see if the broad stock market continues down tomorrow. It still has plenty of time to rally up and make a top in this week's reversal zone or in another (stronger) one next week. That is my preferred scenario to give us a potential high to sell short. But if this market turns down now, we could instead see a sharp fall and a possible cycle low to buy near the end of the month. The news and sentiment on the U.S./China "trade deal" will likely be a major factor in driving this market up or down over the next several weeks. New trade talks are tentatively scheduled for early next month. Hopeful anticipation could propel a rally until then, but if the talks don't produce much, equities could take a dive off that rally (or the market might just rally on the rumor - of a trade deal - and "sell on the news" even if the trade deal works out well, i.e. "buy the rumor, sell the news").
Gold and silver still seem to be headed down to their final medium-term cycle bottoms. Ideally, we would like to see this in the next reversal zone specifically for the precious metals (Sept. 13 - 27). Our target prices for a low are still around $1400 - $1450 in gold and $17 - $17.50 in silver. We will remain on the sidelines now as we watch for this buying opportunity in both metals.
Crude oil prices surged today and made a new monthly high at $55.07. We are, however, just entering a new reversal zone specifically for crude (Sept. 6 - 21) so we are anticipating a top either this week or next which will most likely be followed by a sharp correction to the final medium-term cycle bottom. If the current rally stays under the July 12 high of $60.76 (Oct. contract chart), the cycle will turn bearish and likely take a deep correction. But if this rally gains legs and can exceed $60.76, the cycle will be bullish and the correction down to the final cycle low may be modest. Let's stay on the sidelines in crude oil for now. As I've mentioned before, crude's behavior may mimic the broad stock market so we will keep a sharp eye on both markets as we move forward.
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