MARKETS UPDATE (11:30 pm EST)
The DOW, S&P 500, and NASDAQ all started new medium-term cycles in early February. New cycles are always initially bullish, and, indeed, these indices have been rising steeply from their February lows. The important question now is whether or not they can rise above the highs of their previous cycle tops (that would be 17,977 for the DOW, 2116 for the S&P 500, and 5176 for the NASDAQ). If they can, the broad stock market could be turning bullish and could rally for at least another month or two and make new all-time highs. We are now, however, entering a three week time period when a significant directional reversal (or more than one) can occur in equity markets so we could easily see an early top to these new cycles and a significant correction that could take prices much lower over the next several months. I am favoring this bearish scenario right now so I will be looking for a top to sell short, possibly early this week as March 7-9 could be a significant turning point and both the the DOW and S&P 500 are now inside our target ranges for a top (16,800 - 17,200 in the DOW, 1950 - 2000 in the S&P 500). Even if the current cycles are going to break above their previous highs, there should be at least a small sub-cycle correction before that happens so we can be fairly confident of some sort of a downturn over the next week or two. Currently on the sidelines of the broad stock market but looking to sell short soon.
We covered our gold short positions last week as the price of this metal broke through our stop loss point. We may have gotten "whipsawed" out of a good trade, however, as there are many technical factors still suggesting an imminent and possibly steep correction in both gold and silver. If gold prices can push higher next week and stay under $1300, I may consider going short again (especially if silver prices can stay below $16). If gold starts to close below $1250 it could mean a significant correction has started. March 11 -15 could be a turning point for both gold and silver. We will watch carefully next week for an opportunity to sell short both precious metals. Out of both gold and silver for now.
Crude oil prices have been rising steadily from the current medium-term cycle low on Feb. 11, but early next week is a significant reversal zone for crude so we need to consider taking profits on our long position in this commodity. Our minimal target for this rally is $38 and we are approaching that level now. Stay tuned for a sell trade alert for crude in the first half of this week. Holding my long position in crude for now.
The DOW, S&P 500, and NASDAQ all started new medium-term cycles in early February. New cycles are always initially bullish, and, indeed, these indices have been rising steeply from their February lows. The important question now is whether or not they can rise above the highs of their previous cycle tops (that would be 17,977 for the DOW, 2116 for the S&P 500, and 5176 for the NASDAQ). If they can, the broad stock market could be turning bullish and could rally for at least another month or two and make new all-time highs. We are now, however, entering a three week time period when a significant directional reversal (or more than one) can occur in equity markets so we could easily see an early top to these new cycles and a significant correction that could take prices much lower over the next several months. I am favoring this bearish scenario right now so I will be looking for a top to sell short, possibly early this week as March 7-9 could be a significant turning point and both the the DOW and S&P 500 are now inside our target ranges for a top (16,800 - 17,200 in the DOW, 1950 - 2000 in the S&P 500). Even if the current cycles are going to break above their previous highs, there should be at least a small sub-cycle correction before that happens so we can be fairly confident of some sort of a downturn over the next week or two. Currently on the sidelines of the broad stock market but looking to sell short soon.
We covered our gold short positions last week as the price of this metal broke through our stop loss point. We may have gotten "whipsawed" out of a good trade, however, as there are many technical factors still suggesting an imminent and possibly steep correction in both gold and silver. If gold prices can push higher next week and stay under $1300, I may consider going short again (especially if silver prices can stay below $16). If gold starts to close below $1250 it could mean a significant correction has started. March 11 -15 could be a turning point for both gold and silver. We will watch carefully next week for an opportunity to sell short both precious metals. Out of both gold and silver for now.
Crude oil prices have been rising steadily from the current medium-term cycle low on Feb. 11, but early next week is a significant reversal zone for crude so we need to consider taking profits on our long position in this commodity. Our minimal target for this rally is $38 and we are approaching that level now. Stay tuned for a sell trade alert for crude in the first half of this week. Holding my long position in crude for now.
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