MARKETS UPDATE (10:00 pm EDST)
We entered our new reversal zone (March 20 - April 6) on Friday, but the most likely turning point for any reversals would center around the mid-point of this time frame, and that would be this Friday through the following Monday. Besides focusing our attention on that time frame, another thing to watch for this week or the following week in the broad stock market would be one or two (but not all three) major stock indices (DOW, S&P 500, NASDAQ) making a new low (intermarket bullish divergence). That bullish signal could indicate that a final bottom to the current medium-term cycle is forming, and it could be a good spot to buy. We will watch for it. A good target now for the DOW would be around 17,900 and for the S&P 500 around 2,250. The NASDAQ may have already made its low last Wednesday at 6,686, but that was not in a reversal zone so it could go lower this week. On the sidelines now but we may be looking to go long this week or next.
Last week's lows in gold and silver (gold's $1453 low on Monday and silver's $11.70 low on Wednesday) may have been significant bottoms. There are some technical signals this week suggesting a possible sharp rally now in these prices; however, it's also possible for prices to drop lower into this week's reversal zone. If they do move lower, we may look for a spot to buy. We should note here that any rallies now may be short-lived as it appears this market has turned bearish. We are on the sidelines for now.
The strong and steep rally in the U.S. Dollar Index over the last two weeks seems to be topping out at a little over 102. This is happening as we enter our strong reversal zone this week so there is a good chance the greenback will turn down now. That could stimulate a rally in the precious metals, but again, that rally may not get very far before the dollar turns back up and puts pressure on gold and silver to move lower.
Last Wednesday crude oil made a new low at $20.52 (May contract chart). That could be a significant bottom, but as with the broad stock market and precious metals, crude could also push lower into next week's reversal zone. This market has turned very bearish so we will remain on the sidelines.
We entered our new reversal zone (March 20 - April 6) on Friday, but the most likely turning point for any reversals would center around the mid-point of this time frame, and that would be this Friday through the following Monday. Besides focusing our attention on that time frame, another thing to watch for this week or the following week in the broad stock market would be one or two (but not all three) major stock indices (DOW, S&P 500, NASDAQ) making a new low (intermarket bullish divergence). That bullish signal could indicate that a final bottom to the current medium-term cycle is forming, and it could be a good spot to buy. We will watch for it. A good target now for the DOW would be around 17,900 and for the S&P 500 around 2,250. The NASDAQ may have already made its low last Wednesday at 6,686, but that was not in a reversal zone so it could go lower this week. On the sidelines now but we may be looking to go long this week or next.
Last week's lows in gold and silver (gold's $1453 low on Monday and silver's $11.70 low on Wednesday) may have been significant bottoms. There are some technical signals this week suggesting a possible sharp rally now in these prices; however, it's also possible for prices to drop lower into this week's reversal zone. If they do move lower, we may look for a spot to buy. We should note here that any rallies now may be short-lived as it appears this market has turned bearish. We are on the sidelines for now.
The strong and steep rally in the U.S. Dollar Index over the last two weeks seems to be topping out at a little over 102. This is happening as we enter our strong reversal zone this week so there is a good chance the greenback will turn down now. That could stimulate a rally in the precious metals, but again, that rally may not get very far before the dollar turns back up and puts pressure on gold and silver to move lower.
Last Wednesday crude oil made a new low at $20.52 (May contract chart). That could be a significant bottom, but as with the broad stock market and precious metals, crude could also push lower into next week's reversal zone. This market has turned very bearish so we will remain on the sidelines.
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