MARKETS UPDATE (11:30 pm EST)
The U.S. government's employment report on Friday delivered good and bad news on the state of the nation's work force. January job gains were disappointing, but the unemployment rate was down. The stock market seemed happy with the report as the DOW gained 165 points by the end of the day. This rally, however, was not strong enough to change any of the technical momentum signals in the broad stock market that I described in last Thursday's blog. While the DOW and S&P 500 indices continue to be strongly bearish, the NASDAQ is still mixed bullish and bearish. I am still watching for technical signals that would indicate a shift to a more unified directional momentum in these indices. Until these signals appear, I am not comfortable trading this market. A directional trend should become more apparent by the end of the week as this week's time zone for market reversals ends on Wednesday. Any break now below the 15,400 - 15,500 area in the DOW would be a bearish sign, but if the index holds that support into the end of the week, we could see the start of another strong rally in this market. Still on the sidelines here.
The cycle picture for crude oil is clearing up a bit and technical data may be indicating that this market is turning bullish. What this means is that any corrections now could be minimal and serve as entry points to go long in crude.
Directional momentum is currently mixed bullish and bearish in crude oil charts, and I would like to see stronger bullish technical signals before buying. There is some support now for crude in the $97 -$98 area, so any correction that stays above that price zone may be a good buying opportunity. We will watch for this now. Still out of this market.
As I stated in last Thursday's blog, gold and silver prices may be topping out now (short-term), and they could take a small dip this week. This may present a good opportunity to go long in both metals. An ideal buy spot in gold would be near $1220 and in silver around $19.40. Any clear break below the $1200 area in gold and the $19 in silver would be a bearish sign that would suggest a deeper correction. Directional momentum continues to be strongly bearish in silver but mixed bullish and bearish in gold. The two major gold and silver mining company stock indices, HUI and XAU, also remain mixed bullish and bearish, so there seems to be a stalemate between bulls and bears in precious metals at the moment. On the sidelines of gold and silver and waiting to buy.
I haven't mentioned the U.S. Dollar Index for some time as it has been bouncing back and forth in a rather narrow range between 80 and 81.5 since the start of the new year. Because this index usually moves in a direction opposite that of gold and silver, it should be watched carefully now as any break above or below this recent range could kick start a breakdown or breakout in the precious metals. Momentum in the U.S. Dollar Index is currently mixed bullish and bearish.
The U.S. government's employment report on Friday delivered good and bad news on the state of the nation's work force. January job gains were disappointing, but the unemployment rate was down. The stock market seemed happy with the report as the DOW gained 165 points by the end of the day. This rally, however, was not strong enough to change any of the technical momentum signals in the broad stock market that I described in last Thursday's blog. While the DOW and S&P 500 indices continue to be strongly bearish, the NASDAQ is still mixed bullish and bearish. I am still watching for technical signals that would indicate a shift to a more unified directional momentum in these indices. Until these signals appear, I am not comfortable trading this market. A directional trend should become more apparent by the end of the week as this week's time zone for market reversals ends on Wednesday. Any break now below the 15,400 - 15,500 area in the DOW would be a bearish sign, but if the index holds that support into the end of the week, we could see the start of another strong rally in this market. Still on the sidelines here.
The cycle picture for crude oil is clearing up a bit and technical data may be indicating that this market is turning bullish. What this means is that any corrections now could be minimal and serve as entry points to go long in crude.
Directional momentum is currently mixed bullish and bearish in crude oil charts, and I would like to see stronger bullish technical signals before buying. There is some support now for crude in the $97 -$98 area, so any correction that stays above that price zone may be a good buying opportunity. We will watch for this now. Still out of this market.
As I stated in last Thursday's blog, gold and silver prices may be topping out now (short-term), and they could take a small dip this week. This may present a good opportunity to go long in both metals. An ideal buy spot in gold would be near $1220 and in silver around $19.40. Any clear break below the $1200 area in gold and the $19 in silver would be a bearish sign that would suggest a deeper correction. Directional momentum continues to be strongly bearish in silver but mixed bullish and bearish in gold. The two major gold and silver mining company stock indices, HUI and XAU, also remain mixed bullish and bearish, so there seems to be a stalemate between bulls and bears in precious metals at the moment. On the sidelines of gold and silver and waiting to buy.
I haven't mentioned the U.S. Dollar Index for some time as it has been bouncing back and forth in a rather narrow range between 80 and 81.5 since the start of the new year. Because this index usually moves in a direction opposite that of gold and silver, it should be watched carefully now as any break above or below this recent range could kick start a breakdown or breakout in the precious metals. Momentum in the U.S. Dollar Index is currently mixed bullish and bearish.
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