UPDATE ON BROAD STOCK MARKET and PRECIOUS METALS (11:30 pm EDT)
The broad stock market closed last week with a strong rally on Friday as the DOW pushed briefly above 17,800 before closing at 17,792. The S&P 500 closed at 2,072. Directional momentum in these two indices also changed from mixed bullish and bearish to 100% bullish. The NASDAQ, however, remained mixed bullish and bearish. This is a very difficult market to call right now. Recent dovish statements from central banks and the Fed seem to be pushing equities higher, but cycle patterns and technical studies still point to at least some sort of correction soon, and ,oh yes, there is the matter of the COT charts and Commercial traders liquidating all their long positions in the market recently (not good to bet against them). The next strong reversal zone for this market would be the last two weeks of this month, but there is also the possibility of a reversal at the end of this week. Let's watch how the market moves this week. If it continues to rally to a new top into Friday, we will consider selling short for a brief (but possibly steep) correction. If instead the markets fall into Friday, we may have a good spot to buy for some more rallying. If this market is turning bullish (as suggested by the momentum change in the DOW and S&P 500), then the safest trading strategy for now may be to just buy any short-term corrections, especially as it seems the Fed would like to keep equities buoyant into the November presidential election. Still on the sidelines of this market.
Gold and silver continue to fall towards their medium-term cycle bottoms, but we need to watch carefully now for signs of that final low in both metals. Gold prices could get to $1170, but they could also bottom near the $1200 level (which they are close to now). The end of this week may be a turning point for gold so we will watch for a bottom then. At the moment, it looks like silver's correction could last longer than gold's, and we may see silver's bottom push into the last two weeks of April (gold's correction could too). There is a possibility of silver falling below $14, but we'll consider covering our short position in the $14.70 area (we got close to that level last week). Holding my short positions in both gold and silver.
The broad stock market closed last week with a strong rally on Friday as the DOW pushed briefly above 17,800 before closing at 17,792. The S&P 500 closed at 2,072. Directional momentum in these two indices also changed from mixed bullish and bearish to 100% bullish. The NASDAQ, however, remained mixed bullish and bearish. This is a very difficult market to call right now. Recent dovish statements from central banks and the Fed seem to be pushing equities higher, but cycle patterns and technical studies still point to at least some sort of correction soon, and ,oh yes, there is the matter of the COT charts and Commercial traders liquidating all their long positions in the market recently (not good to bet against them). The next strong reversal zone for this market would be the last two weeks of this month, but there is also the possibility of a reversal at the end of this week. Let's watch how the market moves this week. If it continues to rally to a new top into Friday, we will consider selling short for a brief (but possibly steep) correction. If instead the markets fall into Friday, we may have a good spot to buy for some more rallying. If this market is turning bullish (as suggested by the momentum change in the DOW and S&P 500), then the safest trading strategy for now may be to just buy any short-term corrections, especially as it seems the Fed would like to keep equities buoyant into the November presidential election. Still on the sidelines of this market.
Gold and silver continue to fall towards their medium-term cycle bottoms, but we need to watch carefully now for signs of that final low in both metals. Gold prices could get to $1170, but they could also bottom near the $1200 level (which they are close to now). The end of this week may be a turning point for gold so we will watch for a bottom then. At the moment, it looks like silver's correction could last longer than gold's, and we may see silver's bottom push into the last two weeks of April (gold's correction could too). There is a possibility of silver falling below $14, but we'll consider covering our short position in the $14.70 area (we got close to that level last week). Holding my short positions in both gold and silver.
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