Friday's jobs and employment report from the U.S. Department of Labor delivered mixed signals to investors. While there was some disappointment that the number of new jobs created fell a little short of expectations (192,000 instead of an expected 200,000 based on a MarketWatch poll of economists), there were some positive data showing a significant increase in the size and participation rate of the labor force. The broad stock market never likes ambiguity, and the DOW reacted to this mixed report with a thumbs down by dropping nearly 160 points by the end of the day. This drop, however, may just be a one day nervous reaction as a major bullish directional signal appeared in the DOW chart on Wednesday, and that index finally broke through its Dec.31st high (16,588) and made a new all-time high at 16,631 on Friday just before its drop. Both the DOW and S&P 500 charts are now nearly 100% bullish. The NASDAQ, though, is maintaining its mixed bullish and bearish momentum, and this index suffered a 2.5% drop on Friday (more severe than the DOW's 1% loss). These indices continue to give us mixed signals. I am remaining on the sidelines of the broad stock market until directional signals are more clear.
Short-term technical signals are suggesting that gold and silver could rise a bit more next week before turning down again. Directional momentum remains mixed bullish and bearish in both metals. I may consider short positions if gold rises towards $1330 and silver towards $20.50. Cycle patterns are indicating that we could see a significant bottom in precious metal prices later this month or sometime in May. As long as gold doesn't break below $1000, this bottom will likely be an excellent point to go long in both gold and silver. On the sidelines for now.
Crude oil's cycle picture continues to be a little unclear and directional momentum is still mixed bullish and bearish. This market could go either way right now; however, if crude prices cannot exceed $105 by the end of this month, we could see a major downturn. Still on the sidelines here.