We are seeing a good set up right now for short selling the broad stock market . The rising DOW seems reluctant to break above its recent all-time high of 16,631 on April 4, and we have come to the end of a timing window for a significant directional reversal in this market. In other words, if the market is going to turn down it needs to do so now, and since the DOW is currently very close to that all-time high, we can use that as our stop-loss level with a favorable reward/risk ratio for the trade. I am therefore going to go short in the broad stock market today with a stop-loss based on the DOW and S&P 500 both clearly breaking above their April 4 highs (16,631 in the DOW and 1897 in the S&P).
Crude oil prices fell sharply on Tuesday supposedly because investors decided they had been overreacting to rising tensions in Ukraine and pushing the price up excessively over the last several weeks. Even if this is true we shouldn't underestimate the effect of the geopolitics of that region on oil prices going forward. Crude prices did not clear that $104 - $105 resistance area before falling suddenly so we may have missed a good shorting opportunity due to the volatile dive. Crude may continue to fall, though, into a deeper correction, and I will watch short-term technical signals for signs of another opportunity to go short. Still out of this market.
Gold and silver prices dropped sharply early in the day with both making new lows for the month. Although both metals have now recovered sharply and are closing higher for the day, a strong bear signal is manifesting in the the silver charts which makes directional momentum in this metal now 100% bearish. This will have to be negated before I will feel comfortable going long in the precious metals. In other words, the final bottoms in gold and silver may not be in yet. Still on the sidelines.