The broad stock market fell strongly on Monday and Tuesday, but it did not get to our target zones for a low (22,000 in the DOW and 2,600 in the S&P 500). While it's possible Tuesday's lows were a significant sub-cycle bottom, it's more likely that was just a minor dip. In other words, I think a significant sub-cycle top is still forming (i.e. it was not last Friday) to be followed by a more significant correction. We are still looking to buy that corrective bottom as the cycle is still young and most likely bullish for at least several more weeks. If we get a new top this week or next, we might see the sub-cycle corrective bottom in the first two weeks of May. Still on the sidelines of this market.
Gold and silver, like the broad stock market, also may have hit significant lows on Tuesday. Gold is rising strongly from its low on Tuesday but silver just a bit. The timing is right this week for a sub-cycle bottom, and yes, we have been looking for a spot to buy. Despite these bullish signals, there are some bearish technical factors suggesting precious metal prices could still fall further before starting a significant rally. Another potentially bearish influence would be a significant correction in the broad stock market discussed above. Gold and silver seem to be parroting equity markets right now so they may push higher as equities potentially make a new top this week (or early next week), but then they are likely to fall if equities make a corrective reversal. We are going to be cautious and remain on the sidelines of the precious metals for now.
Crude oil seems to be recovering from its plunge into negative pricing earlier in the week. Today prices are in the $16 range. We are, nevertheless, very cautious about entering this market right now. Crude's unusual and dramatic price plunge on Monday and Tuesday has necessitated a re-calibration of our cycle charts for this commodity, and it will be at least several more weeks before we can be comfortable with any new cycle pattern. Needless to say, this collapse in oil prices does not bode well for the broad stock market and just reinforces my view that a more severe correction is still coming in equities. We will remain on the sidelines of crude oil for the time being.