BRIEF UPDATE ON THE BROAD STOCK MARKET AND PRECIOUS METALS (10:00 pm EST)
The S&P 500 and NASDAQ both ended last week with new all-time highs, and all three major indices (DOW, S&P 500, NASDAQ) closed on Friday in positive territory (although the DOW closed just a bit below its all-time high from Thursday). The threat of a government shutdown didn't seem to dampen last week's rally very much, but that shutdown is no longer a threat and is now reality and could easily continue well into this week (or longer). These markets could still slip into a fearful sell-off. As I've been pointing out in recent blogs, cycle timing and other technical patterns show that we are due or even overdue for a top and significant correction in equities. This government shutdown could be the trigger for such a correction so traders should be ready to sell short soon - possibly this week. We will watch for intermarket bearish divergence between the three market indices early next week (one or two, but not all three indices making new weekly highs). If it happens, it could be our signal to sell short. On the sidelines of the broad stock market for now.
The gold and silver market is giving us mixed short-term signals right now. Gold's price dip last week was not very deep and technically would not qualify as a sub-cycle correction. Silver's dip, however, does qualify as a sub-cycle correction from which a significant rally could start. After looking over the charts carefully, I am going to postpone buying either metal for now as there I think there is a good chance prices could still move lower (gold to $1300 or lower and silver below $17). If prices rally strongly next week, the rally will likely be short-lived, and we will wait for the next corrective dip to buy as the overall picture for precious metals is still quite bullish. On the sidelines of gold and silver.
The S&P 500 and NASDAQ both ended last week with new all-time highs, and all three major indices (DOW, S&P 500, NASDAQ) closed on Friday in positive territory (although the DOW closed just a bit below its all-time high from Thursday). The threat of a government shutdown didn't seem to dampen last week's rally very much, but that shutdown is no longer a threat and is now reality and could easily continue well into this week (or longer). These markets could still slip into a fearful sell-off. As I've been pointing out in recent blogs, cycle timing and other technical patterns show that we are due or even overdue for a top and significant correction in equities. This government shutdown could be the trigger for such a correction so traders should be ready to sell short soon - possibly this week. We will watch for intermarket bearish divergence between the three market indices early next week (one or two, but not all three indices making new weekly highs). If it happens, it could be our signal to sell short. On the sidelines of the broad stock market for now.
The gold and silver market is giving us mixed short-term signals right now. Gold's price dip last week was not very deep and technically would not qualify as a sub-cycle correction. Silver's dip, however, does qualify as a sub-cycle correction from which a significant rally could start. After looking over the charts carefully, I am going to postpone buying either metal for now as there I think there is a good chance prices could still move lower (gold to $1300 or lower and silver below $17). If prices rally strongly next week, the rally will likely be short-lived, and we will wait for the next corrective dip to buy as the overall picture for precious metals is still quite bullish. On the sidelines of gold and silver.
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