The very positive U.S. jobs report released on Friday seemed to lift equity markets from their early week slump, and the DOW was able to close the week above the 20,000 mark. The DOW, S&P 500, and NASDAQ did not, however, make new weekly highs (they all came close) so we will wait to see if they can this week. We need to carefully watch our long position in the broad stock market because this week we have a minor reversal zone around Wednesday so this market could make a sudden turn down from any new high any day now (but most likely Wednesday-Thursday). We will be especially concerned if we see intermarket bearish divergence between these three indices where one or two, but not all three, make a new weekly high. That would be a bearish signal. On the other hand, if all three indices make new highs, we could easily see a strong rally continue into the end of the month. Holding my long position in the broad stock market.
Gold prices are now edging above $1,220, and it looks like we can confirm that both gold and silver started new medium-term cycles in December. This means that these markets could be turning bullish. Nevertheless, timing and cycle studies show that there could be a significant reversal in gold prices sometime next week. Prices could go higher, but we will be watching technical signals for signs of a top that might have us take profits in our current long position. Even if we do get a correction, any dip that holds above $1,170 in gold may be another good opportunity to buy. If silver drops back to the $16.50 area, that too could be a good spot to buy. (We are currently out of silver). Holding my long position in gold for now.