MARKETS UPDATE (8:00 pm EST)
All three major market indices (DOW, S&P 500, NASDAQ) made new all-time highs by the end of last week so we lost our bearish divergence signal from earlier in the week. We will watch for another one early this week as we are now in the center of our reversal zone.(Jan. 7 - 16). If we get it (one or two but not all three indices making new highs), we will consider selling short the broad stock market.
We are still waiting for a deeper correction in both gold and silver to go long. Gold could still get down to the $1500 area, but if it doesn't and starts rallying strongly, we may try and jump in anyway, especially if prices break above last week's high of $1609. It looks like silver has turned especially bullish and we have to relabel silver's medium-term cycle as having started on Dec. 9 at $16.52. That means we could see a sub-cycle dip near $17.20 soon which could turn out to be a good buy spot. If last week's high at $18.72 holds, we might see that sub-cycle low this week. Let's stay on the sidelines of gold and silver for now.
Crude oil may also be close to a sub-cycle low now. Today (Sunday) crude prices continue to dip lower. If prices don't break below $55 early next week, we will consider entering a long position. Any heating up of tensions between the U.S. and Iran will obviously have the potential to trigger a rally in crude prices. On the sidelines of crude oil for now.
All three major market indices (DOW, S&P 500, NASDAQ) made new all-time highs by the end of last week so we lost our bearish divergence signal from earlier in the week. We will watch for another one early this week as we are now in the center of our reversal zone.(Jan. 7 - 16). If we get it (one or two but not all three indices making new highs), we will consider selling short the broad stock market.
We are still waiting for a deeper correction in both gold and silver to go long. Gold could still get down to the $1500 area, but if it doesn't and starts rallying strongly, we may try and jump in anyway, especially if prices break above last week's high of $1609. It looks like silver has turned especially bullish and we have to relabel silver's medium-term cycle as having started on Dec. 9 at $16.52. That means we could see a sub-cycle dip near $17.20 soon which could turn out to be a good buy spot. If last week's high at $18.72 holds, we might see that sub-cycle low this week. Let's stay on the sidelines of gold and silver for now.
Crude oil may also be close to a sub-cycle low now. Today (Sunday) crude prices continue to dip lower. If prices don't break below $55 early next week, we will consider entering a long position. Any heating up of tensions between the U.S. and Iran will obviously have the potential to trigger a rally in crude prices. On the sidelines of crude oil for now.
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