The Alternative Investor
  • Home
  • TRADING BLOG
  • Current Positions
  • Alternative Investor Strategy
  • ETFs
  • About Alternative Investor
  • Contact

Trading Blog        Thursday,  August 27,  2015

8/27/2015

 
BROAD STOCK MARKET TRADE ALERT and MARKETS UPDATE  (2:15 pm EDT)

In my last blog on Tuesday I wrote: " Any rally in the DOW should encounter resistance in the 16,500 area, and if that is breached, there is extremely strong resistance at 17,000. A rebound rally should not get beyond these points, and if approached they may be turning points for a reversal and a resumption of the correction. (Similar resistance is at 1980 and 2050 in the S&P 500.)"  We are reaching those lower resistance areas today, and it looks like a good time for the market to turn over again and fall some more. The 15,370 DOW bottom on Monday was technically within our current reversal zone (but was a bit early); however, we are now in the dead center of it so another reversal is possible. But wait, doesn't it look like the correction is over and we are now recovering?  No, it does not. These markets have already broken below critical support levels, and the cycle structures are pointed down for at least seven more weeks. Volatility increases dramatically when a market is unstable and breaking down, and this is why we are seeing such large price moves right now. The current rally appears to be a "dead cat bounce", also known as a "sucker rally".

If you are a long-term investor who doesn't want to sell short or trade short-term, this is probably a good point to get out of the stock market if you haven't done so already. Other traders may sell short here (or add on to existing short positions). Stop losses can be placed above 17,000 in the DOW and above 2040 in the S&P 500.
Holding my short position in the broad stock market and adding new short positions today.

Gold and silver are a little tricky to call at the moment as we are getting mixed technical signals in this market.
Now through next week is a strong reversal zone for gold (and especially today and tomorrow), and prices are falling strongly into it which suggests an imminent turn up. Nevertheless, the gold and silver cycles seem to be pointed down, and a strong bearish signal appeared in silver charts yesterday making its directional momentum now 100% bearish (gold is still mixed bullish and bearish). I'm thinking that we might get one final push up in gold prices that may or may not exceed the recent high ($1170). If this happens, especially into the end of next week, we could have another good opportunity to sell short. On the sidelines of gold and silver for now.

The U.S. Dollar Index is surging up with the broad stock market this week and is now pushing against resistance at 96. If the stock market turns back down, the dollar will likely reverse as well, and this might trigger a surge in gold as suggested above. It should be noted, however, that any rally in gold would probably be short-term, and the precious metals could easily start to fall with the broad stock market (as they did in the 2008-2009 crash).

Crude oil prices are finally starting to rise as a cycle bottom (and the start of a new cycle) is due this week. Monday's low at $37.75 could be that bottom. Normally I would be looking to buy this bottom, but the broad stock market's ongoing correction and volatility is making me reluctant to do so. If this is the start of a new medium-term cycle in crude and prices rally, they may not get that far before turning down again. Directional momentum in this market remains strongly bearish. I am going to stay out of crude oil for now.




Comments are closed.

    RSS Feed

    Archives

    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012

The Alternative Investor takes no advertising or incentives from any company, institution or investment that is discussed on the website.  Any trading and investing information presented is based on Alternative Investor's independent and unbiased research and analysis of current financial markets.

                                                                                                                                                            LEGAL and DISCLAIMER

All statements and trading/investment information on this website represent solely the personal opinion of The Alternative Investor based on information available at the time of writing and are intended for educational purposes only and are not a recommendation to buy or sell securities, commodities or currencies.  The Alternative Investor is not a licensed broker or financial advisor.  The Alternative Investor presents the trading and investing information on this site in good faith based on his own research into current financial markets but cannot and does not guarantee profit and does not guarantee against any financial losses that result from using this information.  All users of this website and the information presented within it assume full responsibility for their own personal trading/investing decisions and any losses that may result from them.

Trading and investing in any financial market may involve serious risk of loss.  For this reason all traders and investors should never place more money than they can afford to lose in any individual market.  The Alternative Investor monitors several markets and encourages a balanced distribution of funds among them (and others).  The Alternative Investor recommends consulting with a professional financial advisor before making any transactions with financial ramifications.  All trading, investing and financial transactions should always be made in accordance with the appropriate laws and legal regulations in your area of jurisdiction.

The Alternative Investor is an independent researcher and analyst and receives no compensation of any kind from any individuals, groups, companies or institutions discussed on this website.