MARKETS UPDATE (10:30 pm EST)
In last Monday's blog on the broad stock market I wrote:
"If the DOW does make a new high this week, we might even see a rally continue into our next reversal zone (Dec. 6 - 17)."
Well, all three market indices made new all-time highs into the U.S. Thanksgiving holiday (Thursday) negating our bearish divergence signal from Monday, but then markets fell sharply on Friday. That high the day before Thanksgiving was the last day of our reversal zone so it may be a significant top and the start of a correction down into our next reversal zone (Dec. 6 - 17). If this happens, we will look to buy a low in that time frame. If markets push higher next week, however, we will do the opposite and watch for a high to possibly sell short in that next reversal zone. The overall picture for equities right now still looks bullish so our primary trading strategy will be to buy any significant corrections (as long as they don't go too low). Good corrective targets now would be around 27,100 in the DOW and 3,020 in the S&P 500. Still on the sidelines of this market.
Gold and silver cycle patterns are still very unclear. Last week's lows were in a reversal zone specifically for precious metals so we could see a rally in prices now, but there are other technical signals still pointing to lower prices. It's still possible for gold to drop to the $1400 area and silver to $15.50. We will remain on the sidelines of the precious metals for now.
In last Monday's blog on crude oil I wrote:
"We may have missed a good buy spot with last Wednesday's low of $54.85 (Jan. contract chart) in crude oil - assuming that was a legitimate sub-cycle correction (it happened very fast). If it was, prices should rally now to a possible target of $61- $62 over the next several weeks. But it's still possible for prices to make another high in the current reversal zone (Nov. 20 - Dec. 2) and make another sharp correction down. If that happens, we will look to buy that low."
Prices did rally from that $54.85 low to $58.74 in two days. But then prices fell again back to $55.02 on Friday (Nov. 29). This second sharp correction could get into the $52 - $55 range, ideally in our next reversal zone (Dec. 6 - 17). That would be an ideal buy spot if it happens. Let's watch for it. Still on the sidelines of crude oil.
In last Monday's blog on the broad stock market I wrote:
"If the DOW does make a new high this week, we might even see a rally continue into our next reversal zone (Dec. 6 - 17)."
Well, all three market indices made new all-time highs into the U.S. Thanksgiving holiday (Thursday) negating our bearish divergence signal from Monday, but then markets fell sharply on Friday. That high the day before Thanksgiving was the last day of our reversal zone so it may be a significant top and the start of a correction down into our next reversal zone (Dec. 6 - 17). If this happens, we will look to buy a low in that time frame. If markets push higher next week, however, we will do the opposite and watch for a high to possibly sell short in that next reversal zone. The overall picture for equities right now still looks bullish so our primary trading strategy will be to buy any significant corrections (as long as they don't go too low). Good corrective targets now would be around 27,100 in the DOW and 3,020 in the S&P 500. Still on the sidelines of this market.
Gold and silver cycle patterns are still very unclear. Last week's lows were in a reversal zone specifically for precious metals so we could see a rally in prices now, but there are other technical signals still pointing to lower prices. It's still possible for gold to drop to the $1400 area and silver to $15.50. We will remain on the sidelines of the precious metals for now.
In last Monday's blog on crude oil I wrote:
"We may have missed a good buy spot with last Wednesday's low of $54.85 (Jan. contract chart) in crude oil - assuming that was a legitimate sub-cycle correction (it happened very fast). If it was, prices should rally now to a possible target of $61- $62 over the next several weeks. But it's still possible for prices to make another high in the current reversal zone (Nov. 20 - Dec. 2) and make another sharp correction down. If that happens, we will look to buy that low."
Prices did rally from that $54.85 low to $58.74 in two days. But then prices fell again back to $55.02 on Friday (Nov. 29). This second sharp correction could get into the $52 - $55 range, ideally in our next reversal zone (Dec. 6 - 17). That would be an ideal buy spot if it happens. Let's watch for it. Still on the sidelines of crude oil.
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