We are now near the center of a strong general reversal zone for all markets (Dec. 3 - 12). All three broad stock market indices (DOW, S&P 500, NASDAQ) continue to push higher with all three making new all-time highs this week. This market is looking toppy, however, and because we are at the center of a reversal zone, a strong downturn could be imminent. We are remaining on the sidelines of this market as we wait for the next significant corrective low as a possible spot to buy.
Gold prices have been rather flat this week, but they are remaining above the $2541 low from Nov. 14 which could have been a significant cycle low. In addition to the current general reversal zone mentioned above, there is another reversal zone specifically for the precious metals coming up next week (Dec. 11 - 23). Although gold's current direction is unclear, we will keep an eye out for any significant high or low that forms in these time frames. Silver made a double-bottom to its Nov. 14 low ($29.73) on Nov. 28 ($29.70), and prices have been rising from there. It's looking like those two lows are defining a new medium-term cycle bottom, and if so, that would be bullish. I am holding my long position in silver for now. Gold's cycle is less defined at the moment, so I am remaining on the sidelines of that metal.
Crude oil prices have been very flat this week, but they seem to be finding support at the $68 level. Prices seem to be stuck between $68 and the 45-day moving average (around $70). It's still not clear if this market wants to make a new low below $64 before embarking on another significant rally. If we don't see a lower low happen in our current reversal zone, there is another reversal zone specifically for crude coming up Dec. 17 - 27 which could correspond to a low (or high if this market starts to rally). I am staying on the sidelines of crude for now.