CRUDE OIL TRADE ALERT and BRIEF MARKETS UPDATE (2:05 pm EST)
We are getting a mixed bag of technical signals from all markets right now which is making our recent short-term trading difficult. Unfortunately, the crude oil market has suddenly turned bearish and is flashing a medium-term bearish signal today as it breaks below our stop loss level of $103 - $104. This means we should sell our long positions now. We are likely seeing that major cycle correction in crude starting now (i.e. without a rally first into late August) with the recent Aug. 2nd high near $109 being a bearish double top to the high of July 19. If this turns out to be the case, I will wait for the bottom of the cycle before going long again.
This sudden bearish turn in crude oil may be a forewarning of bearishness in the broad stock market as well. The DOW seems to be finding support above 15,400, but it needs to close above the resistance (formerly support) area of 15,540 -15,570 and even make new highs before we can think about going long. Momentum is still mostly bullish, but if the DOW breaks lower now (below 15,400) we may see momentum suddenly shift to bearish (as it has for oil). Still on the sidelines of this market.
It looks like I bailed out of silver a little too early yesterday as both gold and silver prices are up significantly today. Gold is closing back above $1300 and silver is again above $20. This may be the start of the rally we want to see, but I am still cautious here because gold and silver mining company stocks are now very bearish, and a medium-term bearish signal is present in some contract price charts for silver (the spot price charts for both gold and silver are still medium-term bullish). I am going to maintain my long position in gold for now, but we need to see the price rally above $1325 and even $1350 soon to negate the danger of a further drop.
We are getting a mixed bag of technical signals from all markets right now which is making our recent short-term trading difficult. Unfortunately, the crude oil market has suddenly turned bearish and is flashing a medium-term bearish signal today as it breaks below our stop loss level of $103 - $104. This means we should sell our long positions now. We are likely seeing that major cycle correction in crude starting now (i.e. without a rally first into late August) with the recent Aug. 2nd high near $109 being a bearish double top to the high of July 19. If this turns out to be the case, I will wait for the bottom of the cycle before going long again.
This sudden bearish turn in crude oil may be a forewarning of bearishness in the broad stock market as well. The DOW seems to be finding support above 15,400, but it needs to close above the resistance (formerly support) area of 15,540 -15,570 and even make new highs before we can think about going long. Momentum is still mostly bullish, but if the DOW breaks lower now (below 15,400) we may see momentum suddenly shift to bearish (as it has for oil). Still on the sidelines of this market.
It looks like I bailed out of silver a little too early yesterday as both gold and silver prices are up significantly today. Gold is closing back above $1300 and silver is again above $20. This may be the start of the rally we want to see, but I am still cautious here because gold and silver mining company stocks are now very bearish, and a medium-term bearish signal is present in some contract price charts for silver (the spot price charts for both gold and silver are still medium-term bullish). I am going to maintain my long position in gold for now, but we need to see the price rally above $1325 and even $1350 soon to negate the danger of a further drop.
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