MARKETS UPDATE (11:00 pm EDST)
We covered our short position in the broad stock market last Thursday close to our stop loss point and were able to avoid another surge up on Friday when the DOW gained another 243 points. The market closed very bullish for the week so we could easily see more rallying this week. Nevertheless, we are now in the center of a reversal zone that ends on Wednesday so we could still see a top by then and the start of a correction down. If that happens, we will wait for the corrective bottom to buy. That bottom (if it happens) could easily fall into our next reversal zone (July 19-30), but I think there's also a good chance of a rally into that time frame instead. If that scenario unfolds, we will be looking for another opportunity to sell short for a steep (but brief) correction down. On the sidelines for now.
Gold and silver are a bit tricky to call right now. We stepped out of our long position in gold last week. (We were stopped out of our silver long position the previous week.) There is a risk now of a deeper correction in both metals which could take gold to the $1360 area and silver as low as $14.20. There's a chance we might see those lows early this week if prices fall sharply now, but we may instead have to wait until the following week for a final bottom. We will probably be looking to buy again at those target prices as both metals still look bullish. Still on the sidelines of gold and silver.
Crude oil has been rallying strongly from its June 12 cycle start ($51.25 - Aug. contract chart) but is now due for a sub-cycle correction. A top may happen early this week (in the reversal zone mentioned above), but prices could also push higher into the following week when we have another reversal zone (July 19-30) which is specifically relevant to crude, and that might be the top. Either way, any top followed by a corrective dip down to the $55 - $56 area could be a good place to buy now as this market still looks bullish into the summer. Still on the sidelines of crude.
We covered our short position in the broad stock market last Thursday close to our stop loss point and were able to avoid another surge up on Friday when the DOW gained another 243 points. The market closed very bullish for the week so we could easily see more rallying this week. Nevertheless, we are now in the center of a reversal zone that ends on Wednesday so we could still see a top by then and the start of a correction down. If that happens, we will wait for the corrective bottom to buy. That bottom (if it happens) could easily fall into our next reversal zone (July 19-30), but I think there's also a good chance of a rally into that time frame instead. If that scenario unfolds, we will be looking for another opportunity to sell short for a steep (but brief) correction down. On the sidelines for now.
Gold and silver are a bit tricky to call right now. We stepped out of our long position in gold last week. (We were stopped out of our silver long position the previous week.) There is a risk now of a deeper correction in both metals which could take gold to the $1360 area and silver as low as $14.20. There's a chance we might see those lows early this week if prices fall sharply now, but we may instead have to wait until the following week for a final bottom. We will probably be looking to buy again at those target prices as both metals still look bullish. Still on the sidelines of gold and silver.
Crude oil has been rallying strongly from its June 12 cycle start ($51.25 - Aug. contract chart) but is now due for a sub-cycle correction. A top may happen early this week (in the reversal zone mentioned above), but prices could also push higher into the following week when we have another reversal zone (July 19-30) which is specifically relevant to crude, and that might be the top. Either way, any top followed by a corrective dip down to the $55 - $56 area could be a good place to buy now as this market still looks bullish into the summer. Still on the sidelines of crude.
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