SILVER TRADE ALERT and MARKETS UPDATE (8:30 pm EST)
Last week silver closed below the stop loss point I had set at $30. There's a possibility that an older medium-term cycle is finding its final bottom now, and from that low a bullish rally could start. But if the original labeling of a new medium-term cycle starting from a double-bottom on Nov. 14 and Nov. 28 is correct, the cycle has turned bearish and will continue down. At the risk of being whipsawed out of a new bullish cycle, I am going to bail out of my silver long position now. I am placing a sell order for the market's open tomorrow. Right now a sell would give us about a 3% loss, but if the market opens higher tomorrow, it may be less.
Gold may also be in a position to push lower before reversing back up (it may get down to $2500), but it doesn't have to as last week's low was inside a reversal zone. If gold does make a new low next week and stabilizes, it may be a good spot to buy. For now I am still on the sidelines of gold.
In last Wednesday's blog on the broad stock market I wrote:
"The DOW and S&P 500 have been falling for nearly two weeks, but today is only day 3 for the NASDAQ's fall from its all-time high of 20,204 on Monday. A final corrective drop in a medium-term cycle should last from 2 - 5 weeks, so the NASDAQ has to fall some more to satisfy that requirement. If today's panic sell-off continues into next week, that shouldn't be a problem..."
Well, the panic sell-off from the Fed's hawkish rhetoric on Wednesday stabilized a bit on Thursday, but the market certainly did not recover. All three indices made new lows on Friday, and the NASDAQ continued down to approach its 45-day moving average. Because we are still in a strong reversal zone all next week, there's a good chance the final medium-term cycle bottoms could happen then (if they didn't happen for the DOW and S&P 500 already on Friday). We will watch for a possible low to buy next week in the broad stock market.
Crude oil prices continue to be range bound between $66 and $72 (Feb. contract chart), so I am staying on the sidelines of this market for now.
Last week silver closed below the stop loss point I had set at $30. There's a possibility that an older medium-term cycle is finding its final bottom now, and from that low a bullish rally could start. But if the original labeling of a new medium-term cycle starting from a double-bottom on Nov. 14 and Nov. 28 is correct, the cycle has turned bearish and will continue down. At the risk of being whipsawed out of a new bullish cycle, I am going to bail out of my silver long position now. I am placing a sell order for the market's open tomorrow. Right now a sell would give us about a 3% loss, but if the market opens higher tomorrow, it may be less.
Gold may also be in a position to push lower before reversing back up (it may get down to $2500), but it doesn't have to as last week's low was inside a reversal zone. If gold does make a new low next week and stabilizes, it may be a good spot to buy. For now I am still on the sidelines of gold.
In last Wednesday's blog on the broad stock market I wrote:
"The DOW and S&P 500 have been falling for nearly two weeks, but today is only day 3 for the NASDAQ's fall from its all-time high of 20,204 on Monday. A final corrective drop in a medium-term cycle should last from 2 - 5 weeks, so the NASDAQ has to fall some more to satisfy that requirement. If today's panic sell-off continues into next week, that shouldn't be a problem..."
Well, the panic sell-off from the Fed's hawkish rhetoric on Wednesday stabilized a bit on Thursday, but the market certainly did not recover. All three indices made new lows on Friday, and the NASDAQ continued down to approach its 45-day moving average. Because we are still in a strong reversal zone all next week, there's a good chance the final medium-term cycle bottoms could happen then (if they didn't happen for the DOW and S&P 500 already on Friday). We will watch for a possible low to buy next week in the broad stock market.
Crude oil prices continue to be range bound between $66 and $72 (Feb. contract chart), so I am staying on the sidelines of this market for now.
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