MARKETS UPDATE (10:30 pm EDT)
It looks like we were a bit premature in going long in crude oil last Wednesday. Prices fell sharply on Thursday and Friday which puts our trade in the red. I am holding my long position, however, because the May 24 low ($76.15) was in the center of a strong reversal zone, and more importantly, the final medium-term cycle low in crude was (is) due (overdue). Next week we enter another strong reversal zone for both crude and our other markets (June 6 - 14). Crude may now be forming a triple-bottom with the lows from May 15 and May 24, and there is a strong line of support around $75. Let's continue to hold our long position with a stop loss based on a close below $75.
Gold and silver prices continued to fall last week with gold breaking below its 15-day and 45-day moving average and silver closing between its 15-day and 45-day moving average. Both metals seem headed for their final medium-term cycle bottoms, and we will look for that inside this upcoming general reversal zone June 6 - 14. It will likely be a good spot to buy. We are still on the sidelines of both gold and silver.
On Friday all three broad stock market indices (DOW, S&P 500, NASDAQ) may have made their first significant sub-cycle corrections in their current (young) medium-term cycles (which began with their mid-April lows). The DOW closed below both its 15-day and 45-day moving averages, while the S&P 500 and NASDAQ closed between their 15-day and 45-day moving averages. Although the DOW is practically making a double-bottom to its mid-April low, the S&P 500 and especially the NASDAQ are well above their April lows. Because Friday was not inside any reversal zone, it's possible these indices could fall further to make deeper sub-cycle bottoms in next week's reversal zone, which starts on Wednesday. If Friday was a sub-cycle bottom, however, we could see this market rally strongly into the upcoming reversal zone. In either case, I am not interested in a long position right now in this market. Let's remain on the sidelines of the broad stock market for now.
It looks like we were a bit premature in going long in crude oil last Wednesday. Prices fell sharply on Thursday and Friday which puts our trade in the red. I am holding my long position, however, because the May 24 low ($76.15) was in the center of a strong reversal zone, and more importantly, the final medium-term cycle low in crude was (is) due (overdue). Next week we enter another strong reversal zone for both crude and our other markets (June 6 - 14). Crude may now be forming a triple-bottom with the lows from May 15 and May 24, and there is a strong line of support around $75. Let's continue to hold our long position with a stop loss based on a close below $75.
Gold and silver prices continued to fall last week with gold breaking below its 15-day and 45-day moving average and silver closing between its 15-day and 45-day moving average. Both metals seem headed for their final medium-term cycle bottoms, and we will look for that inside this upcoming general reversal zone June 6 - 14. It will likely be a good spot to buy. We are still on the sidelines of both gold and silver.
On Friday all three broad stock market indices (DOW, S&P 500, NASDAQ) may have made their first significant sub-cycle corrections in their current (young) medium-term cycles (which began with their mid-April lows). The DOW closed below both its 15-day and 45-day moving averages, while the S&P 500 and NASDAQ closed between their 15-day and 45-day moving averages. Although the DOW is practically making a double-bottom to its mid-April low, the S&P 500 and especially the NASDAQ are well above their April lows. Because Friday was not inside any reversal zone, it's possible these indices could fall further to make deeper sub-cycle bottoms in next week's reversal zone, which starts on Wednesday. If Friday was a sub-cycle bottom, however, we could see this market rally strongly into the upcoming reversal zone. In either case, I am not interested in a long position right now in this market. Let's remain on the sidelines of the broad stock market for now.
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