MARKETS UPDATE (9:30 pm EST)
Last Tuesday I wrote on the broad stock market:
"...the cycle timing is just about right for these indices to be making their first significant sub-cycle high followed by a significant correction. If the DOW and S&P 500 cannot break above their Jan. 26 all-time highs (26,617 and 2,873, respectively) as the NASDAQ continues to soar above its Jan. 26 all-time high (7,501) this week then we will have a very strong intermarket bearish divergence signal and possibly that first sub-cycle top."
Last week neither the DOW nor S&P 500 exceeded their all-time Jan. 26 highs while the NASDAQ remained above its all-time high so our intermaket bearish divergence signal is still in effect. It is likely these indices made significant tops early last week and are now falling into a sub-cycle correction that will bottom later this week or in the following week (i.e. our next reversal zone March 22 - April 2). If this is the case, it's a bit late to sell short so we will just wait for the bottom to buy (as long as the correction doesn't go too low). If instead of falling, equities start rallying again and make a high into this reversal zone, we will look to sell short from that high. Still on the sidelines of the broad stock market.
Gold and silver are breaking their support lines at $1320 and $16.40 respectively, but gold is still above our stop loss point of $1304, and silver is still above $16.18, both important lows in the current cycle. This is a tricky trading situation. If both those lows break this week, we will want to bail out of our long gold position, but if only one metal breaks its low and not the other (bullish divergence signal) then we will likely stay long in gold (and maybe even go long in silver) - especially if this happens later in the week. Currently long in gold but out of silver.
Last week crude oil's support at $60 held and prices rallied a bit. Crude's overall chart, however, does not look bullish enough for us to go long. The current rally may only test the Feb. 26 high of $64.24 (April contract chart) before turning down again which (if it happens) would suggest crude's trend is turning bearish. If that high breaks, however, we could be back on track for a bullish rally that could push above $70. We will stay on the sidelines of crude for now.
Last Tuesday I wrote on the broad stock market:
"...the cycle timing is just about right for these indices to be making their first significant sub-cycle high followed by a significant correction. If the DOW and S&P 500 cannot break above their Jan. 26 all-time highs (26,617 and 2,873, respectively) as the NASDAQ continues to soar above its Jan. 26 all-time high (7,501) this week then we will have a very strong intermarket bearish divergence signal and possibly that first sub-cycle top."
Last week neither the DOW nor S&P 500 exceeded their all-time Jan. 26 highs while the NASDAQ remained above its all-time high so our intermaket bearish divergence signal is still in effect. It is likely these indices made significant tops early last week and are now falling into a sub-cycle correction that will bottom later this week or in the following week (i.e. our next reversal zone March 22 - April 2). If this is the case, it's a bit late to sell short so we will just wait for the bottom to buy (as long as the correction doesn't go too low). If instead of falling, equities start rallying again and make a high into this reversal zone, we will look to sell short from that high. Still on the sidelines of the broad stock market.
Gold and silver are breaking their support lines at $1320 and $16.40 respectively, but gold is still above our stop loss point of $1304, and silver is still above $16.18, both important lows in the current cycle. This is a tricky trading situation. If both those lows break this week, we will want to bail out of our long gold position, but if only one metal breaks its low and not the other (bullish divergence signal) then we will likely stay long in gold (and maybe even go long in silver) - especially if this happens later in the week. Currently long in gold but out of silver.
Last week crude oil's support at $60 held and prices rallied a bit. Crude's overall chart, however, does not look bullish enough for us to go long. The current rally may only test the Feb. 26 high of $64.24 (April contract chart) before turning down again which (if it happens) would suggest crude's trend is turning bearish. If that high breaks, however, we could be back on track for a bullish rally that could push above $70. We will stay on the sidelines of crude for now.
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