After making deep lows yesterday (DOW and S&P 500) and Tuesday (NASDAQ) between their 15-day and 45-day moving averages and inside a strong "pivot point" zone for the broad stock market, all three indices are rallying strongly today and breaking back above their 15-day moving averages. This is a strong signal that the sub-cycle correction is over and a new rally is starting. Let's enter a long position in this market today with a stop loss based on yesterday's lows in the DOW and S&P 500 and Tuesday's lows in the NASDAQ.
Both Gold and silver seem reluctant to rally as they encounter resistance at their 15-day moving averages. We need to watch this carefully now as a break above those averages as well as a break above their highs from April 14 is necessary to confirm that their cycles are bullish. Otherwise, both markets could be turning bearish. Silver prices may be edging to a new low either tomorrow or Monday near our "pivot points" as gold bides its time above last week's low. That sort of bearish divergence between the two metals could still be a signal to buy silver, but lets's stay on the sidelines for now. We continue to hold our long position in gold.
Crude oil prices are edging slightly lower today, but the correction so far from the April 12 high has been 11 days. and that is too long for a short sub-cycle correction in a bullish cycle. That means a longer sub-cycle correction could be in progress or the market could be turning bearish. Either way, we want to stay on the sidelines for now.