In last Thursday's blog on gold and silver I wrote:
" I would still like to see either gold or silver (but not both) exceed their late February highs (that would be $1,263.60 in gold and $18.54 in silver) for a case of intermarket bearish divergence in this reversal zone. That would be a good signal to sell short."
On Friday gold prices rallied to $1,270.50 before falling and closing the day around $1,254. Silver also rallied but did not exceed $18.54 and then closed near $18.00. We thus have a case of intermarket bearish divergence with both metals closing in the lower part of their day's range (also bearish), and it is happening in the center of a reversal zone for precious metals near the end of the medium-term cycles of both gold and silver. It looks like a good time to sell these metals short as it is likely they will now move down to their final medium-term cycle bottoms over the next week or two. Gold could easily fall to the $1,200 area and silver to the $17 area. Lets enter short positions in both gold and silver for tomorrow morning's market open with a stop loss based on both metals making new weekly highs.
In Thursday's blog I made this comment on the broad stock market:
"We are now in a strong reversal zone April 5 - 21 for equities so the question is will this market fall in this time period and make a significant bottom to reverse up or will it push higher to make a significant high and then reverse down?"
Equities fell a bit on Friday so I am still favoring a cycle bottom this week or next (especially as we had a case of bearish divergence between the NASDAQ and the DOW and S&P 500 last week). Even if these indices push higher now, we will still be looking for a significant top to happen this week or next and then a significant correction to follow.
Holding my short position in the broad stock market.
Crude oil most likely started a new medium-term cycle with the $47 double bottom of March 22 and 27. We are early in this new cycle, and that is bullish (unless prices start moving below $47). Last week crude prices peaked near $53. That was in a major reversal zone for crude (which could extend into this Wednesday) so we could now see a correction down. We will look for a target price near $50 for this correction which may be a good spot to buy. On the sidelines of crude oil.