As I mentioned in my last blog, timing factors point to the possiblility of significant reversals in all the markets we follow next week, so I will discuss each one here in terms of our strategy going into the week.
The broad stock market was relatively stable and flat last week so we will watch closely its movement into the middle of next week (a sharp rise into the week would suggest a reversal down to follow, but a strong fall early in the week might lead to a low which could be the turning point for another strong rally). The DOW, S&P 500, and NASDAQ all continue to flash strong bullish momentum indicators, and until this changes, any corrections in these markets may be minor. I should also mention here that market manipulation (some behind the scenes and some more overt such as the Federal Reserve's recent liberal application of "quantitative easing") always needs to be factored into our analysis of the broad stock market, and this usually favors rallies and reduces the depth and duration of corrections. This pattern of "truncated" corrections is something I have been observing for at least the last five years in the broad stock market. The overall picture for this market is not clear at the moment which is why we are on the sidelines for now and waiting for a stronger directional signal.
Crude oil trended down into last Thursday, but then was up on Friday and is up some more today. As with the broad stock market, we will watch carefully crude's direction into the week and look for a possible reversal. If prices rise close to $95 or above, we may take profits in our long positions to sidestep what could be a significant correction.
As I mentioned in the last blog, It is looking like there could be a minor correction down in both gold and silver before these metals begin to take off strongly. If gold and silver rally strongly early in the week, we may consider taking profits on our long positions (and reentering after the correction), but if prices move down Monday - Wednesday we will probably ride out any corrections as long as prices remain above the strong support levels at $1500-1530 in gold and $26-27 in silver. Despite this potential correction, all technical signals for gold and silver continue to be extreemly positive and bullish.
The Swiss Franc flashed a major bullish signal today which supports our suspicion that March 14 was the start of a new cycle in this currency which is bullish. Like the other markets discussed above, this one could also reverse next week (most likely towards the end of the week) and take a small correction, so we will watch the price carefully for an ideal entry point.