The broad stock market made new weekly highs last Monday (which was at the center of a reversal zone) and then fell for the rest of the week. That looks like a significant turning point. A medium-term cycle bottom is due within the next four weeks. That could happen this week, but more likely that bottom would coincide with the next strong reversal zone at the end of November. The surprising news at the end of last week of the FBI's re-investigation of Hillary Clinton's emails will likely boost support for her rival Donald Trump (at least for a few days), and because the specter of a Trump victory seems to make equity markets nervous (at least in the short-term because he is a political newcomer and markets don't like unknown variables), this could support our idea of the markets falling now.
I am going to sell the broad market short now with a stop loss at last Monday's highs should the market turn up and close back above those highs (that would be 18,275 in the DOW and 2,155 in the S&P 500). I am placing this trade for tomorrow's open (Monday), but traders who read this late could enter a short position anytime tomorrow as long as those highs are not exceeded or the market doesn't drop dramatically (say, below 17,959 in the DOW and 2,100 in the S&P 500 - i.e. these points could become support for another reversal up and would be poor spots to sell short).
The medium-term cycles of both gold and silver are also due to bottom soon. They are actually overdue and could even bottom this week; however, there is a possibility that both metals already bottomed and began new cycles in early October and are still in their early stage. If that is the case then this market could turn bullish. We want to buy the start of any new cycle, but current technical signals are suggesting that the bottoms are not in yet and prices could go back down to the $1,200 area in gold and the $16 area in silver. Gold and silver both made new weekly highs last week, and we are now moving into the center of a strong reversal zone specifically related to precious metals which supports the idea of an imminent turn down. This market is tricky to call right now. I am going to wait and see if prices edge higher into early next week. If they do, we will consider selling short for a final move down to the cycle bottoms. On the sidelines for now.
Crude oil prices now appear to be making a subcycle bottom in a strong reversal zone and are close to our target range of $47 - $48. A bearish signal just appeared in crude's Sunday night chart so I am going to wait and see if prices can move lower and more directly into our target zone early next week. If they do, it could give us a good buy spot. Still on the sidelines of crude oil.