UPDATES ON THE BROAD STOCK MARKET and PRECIOUS METALS (11:30 pm EDT)
It is now very late in the medium-term cycles of the DOW, S&P 500, and NASDAQ. The trend of these cycles has been bullish, but we should now be looking for a final high (top) and a sharp 2-5 week correction to the final cycle bottoms. On Friday, the DOW soared up to make a new all-time high at 45,757. The S&P 500, and especially the NASDAQ, both fell short of an all-time high, and that gives us another intermarket bearish divergence signal. Not only that, it is happening near the center of another strong general reversal zone (Aug. 20 - 29). This means a turn down could be imminent. We will probably want to buy the final corrective bottom to these cycles, but that may end up being in September, assuming a 2-5 week fall from the final tops (and also assuming the fall is not TOO steep). We are still on the sidelines of the broad stock market.
There is a possibility that gold started a new medium-term cycle with its low on July 30 ($3270). If so, prices could be bullish now and poised to challenge April's all-time high at $3495. But it's more likely gold is near the end of an older (medium-term) cycle and will soon make a sharp correction down to its final bottom. The fact that prices are rallying into the center of our current general reversal zone supports this idea of an imminent sharp reversal down. For now, we will look for a correction down to the $3200 level and a possible spot to buy. We are on the sidelines of gold.
As with gold, the end of July may have seen the start of a new medium-term cycle in silver with the low of $36.28 on July 31. If that's the case, we could soon see the July 23 high of $39.52 exceeded. The alternative view could see an imminent reversal back down before breaking that high, and a final correction down to the bottom of an older medium-term cycle - close to the $35 area. This could turn out to be a good buy spot. For now, we are still on the sidelines of silver.
It is now very late in the medium-term cycles of the DOW, S&P 500, and NASDAQ. The trend of these cycles has been bullish, but we should now be looking for a final high (top) and a sharp 2-5 week correction to the final cycle bottoms. On Friday, the DOW soared up to make a new all-time high at 45,757. The S&P 500, and especially the NASDAQ, both fell short of an all-time high, and that gives us another intermarket bearish divergence signal. Not only that, it is happening near the center of another strong general reversal zone (Aug. 20 - 29). This means a turn down could be imminent. We will probably want to buy the final corrective bottom to these cycles, but that may end up being in September, assuming a 2-5 week fall from the final tops (and also assuming the fall is not TOO steep). We are still on the sidelines of the broad stock market.
There is a possibility that gold started a new medium-term cycle with its low on July 30 ($3270). If so, prices could be bullish now and poised to challenge April's all-time high at $3495. But it's more likely gold is near the end of an older (medium-term) cycle and will soon make a sharp correction down to its final bottom. The fact that prices are rallying into the center of our current general reversal zone supports this idea of an imminent sharp reversal down. For now, we will look for a correction down to the $3200 level and a possible spot to buy. We are on the sidelines of gold.
As with gold, the end of July may have seen the start of a new medium-term cycle in silver with the low of $36.28 on July 31. If that's the case, we could soon see the July 23 high of $39.52 exceeded. The alternative view could see an imminent reversal back down before breaking that high, and a final correction down to the bottom of an older medium-term cycle - close to the $35 area. This could turn out to be a good buy spot. For now, we are still on the sidelines of silver.
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