MARKETS UPDATE (5:30 pm EDST)
All three major broad stock market indices (DOW, S&P 500, NASDAQ) made deep, significant lows last Monday (25,222, 2,801, and 7,627, respectively). That may have been the final medium-term cycle bottom(s) for any one of them (or possibly all three). After those lows, the market rallied strongly into a possible top on Thursday (the start of a new reversal zone - May 15-22) and then turned sharply down on Friday. We could see this correction continue into this week. If any of those lows on Monday were cycle bottoms then the correction shouldn't break below those levels. If one or two (but not all three) of those lows break (especially early in the week), that would give us a bullish divergence signal and a good spot to buy. We don't want to see all three lows breaking, however, as that would be a bearish sign. Once the cycle lows are in (last week or possibly this week) we will want to be long as we are anticipating the start of a new cycle and another strong rally into the summer. On the sidelines for now.
Both gold and silver prices fell steeply last week. Silver made a new monthly low while gold held above its April low low so we are seeing intermarket bulish divergence here. This is also happening in the center of a reversal zone. If gold can stay above its April 23 low of $1265 through the first half of this week (and thus maintain the bullish divergence signal) then we may look to go long in both metals. But I am not so sure this will happen. There are quite a few short-term bearish signals right now suggesting gold could push lower. If it breaks bellow $1265 then prices could be down for several more weeks before we see a cycle bottom. Silver could also be making a cycle bottom now (with gold), but if gold breaks that $1265 low, silver will likely move lower, and we may not see a final cycle bottom until mid-June. So the key here is whether or not gold stays above $1265 next week. On the sidelines for now and still waiting to buy the final medium-term cycle bottom in both metals.
Crude oil's low at $60.04 on May 5 (June contract chart) may well have been the start of a new medium-term cycle, but its weak rally from there is calling this into question (new cycles usually start off very bullish). Prices are now rising into the current reversal zone (May 15 -22) so we could see them back down from a high between now and this Wednesday. If they do go lower and hold above that $60.04 low, we will look to buy. But if that low breaks, we may have to wait until June for the final cycle bottom. Still on the sidelines and waiting for the final medium-term cycle bottom to buy. Once that bottom is in we expect another strong rally into the summer.
All three major broad stock market indices (DOW, S&P 500, NASDAQ) made deep, significant lows last Monday (25,222, 2,801, and 7,627, respectively). That may have been the final medium-term cycle bottom(s) for any one of them (or possibly all three). After those lows, the market rallied strongly into a possible top on Thursday (the start of a new reversal zone - May 15-22) and then turned sharply down on Friday. We could see this correction continue into this week. If any of those lows on Monday were cycle bottoms then the correction shouldn't break below those levels. If one or two (but not all three) of those lows break (especially early in the week), that would give us a bullish divergence signal and a good spot to buy. We don't want to see all three lows breaking, however, as that would be a bearish sign. Once the cycle lows are in (last week or possibly this week) we will want to be long as we are anticipating the start of a new cycle and another strong rally into the summer. On the sidelines for now.
Both gold and silver prices fell steeply last week. Silver made a new monthly low while gold held above its April low low so we are seeing intermarket bulish divergence here. This is also happening in the center of a reversal zone. If gold can stay above its April 23 low of $1265 through the first half of this week (and thus maintain the bullish divergence signal) then we may look to go long in both metals. But I am not so sure this will happen. There are quite a few short-term bearish signals right now suggesting gold could push lower. If it breaks bellow $1265 then prices could be down for several more weeks before we see a cycle bottom. Silver could also be making a cycle bottom now (with gold), but if gold breaks that $1265 low, silver will likely move lower, and we may not see a final cycle bottom until mid-June. So the key here is whether or not gold stays above $1265 next week. On the sidelines for now and still waiting to buy the final medium-term cycle bottom in both metals.
Crude oil's low at $60.04 on May 5 (June contract chart) may well have been the start of a new medium-term cycle, but its weak rally from there is calling this into question (new cycles usually start off very bullish). Prices are now rising into the current reversal zone (May 15 -22) so we could see them back down from a high between now and this Wednesday. If they do go lower and hold above that $60.04 low, we will look to buy. But if that low breaks, we may have to wait until June for the final cycle bottom. Still on the sidelines and waiting for the final medium-term cycle bottom to buy. Once that bottom is in we expect another strong rally into the summer.
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