MARKETS UPDATE (10:00 pm EDST)
After a bullish "gap-up" on Tuesday, all three of our broad stock market indices (DOW, S&P 500, NASDAQ) have been edging back down a bit. We enter a new strong reversal zone next week (April 4 - April 20). If these indices fall into this time frame, we will watch for support near those targets that I suggested in my last blog for a modest correction (around 33,600 in the DOW, 4,300 in the S&P 500, and 13,500 in the NASDAQ). If these target areas hold, they could be good buy spots for another rally to challenge the all-time highs in these indices. If instead we see a rally into the new reversal zone, we may have to wait a little longer for a corrective drop from a top in this time frame to those targets.
We should note here that it's still possible that the all-time highs in November (NASDAQ) and January (DOW and S&P 500) are the final long-term cycle tops, and that a severe long-term cycle correction is already underway. A rally to challenge those highs over the next several weeks would question that, and a clear break to new all-time highs by ALL THREE indices would suggest that a severe correction has been averted. We will remain on the sidelines for now and watch for a possible buy spot in those target areas.
In Monday's blog on gold and silver, I mentioned that we are nearing the end of the current medium-term cycles in both metals and that we are seeing a final sub-cycle rally in these cycles before the final sharp drop to the cycle bottom. I wrote:
"We were planning on selling short at the sub-cycle top around $2050 in gold and $26.50 in silver, but we may not get to do that if the corrections have already started from last week's tops. Let's wait and see if prices can push higher and closer to our targets this week or next and perhaps give us a bearish divergence signal (gold or silver making a new high without the other). That would be an ideal signal to sell short."
Well, prices dropped dramatically in both metals on Monday and Tuesday but recovered a bit yesterday and today. The final tops to these medium-term cycles may already be in with the highs from earlier this month, and prices may be headed south now. If prices can rally from here into next week's reversal zone, we might still get a chance to sell short if one metal makes a new high without the other (bearish divergence). Otherwise, we will just wait for the final cycle bottoms which could end up in this reversal zone or another one specifically for gold and silver coming up April 12 - 20. We will remain on the sidelines of the precious metals for now.
Crude oil prices continued their roller coaster ride this week with large surges up and down. Because of the ongoing Russia/Ukraine war, crude prices are very volatile, and this is an unsafe market to trade at the moment. President Biden today ordered the release of 1 million barrels of oil per day from the nation's strategic petroleum reserve for six months to help curb rising fuel prices. This caused crude prices to drop significantly, but of course, they may not stay down considering the volatile nature of the market right now. As I stated in Monday's blog, we are waiting for the final bottom in crude's current and old medium-term cycle with a target around $85 - $90. That bottom might be a good spot to buy. We also can't rule out another surge up before the final bottom. We will remain on the sidelines of crude for now.
After a bullish "gap-up" on Tuesday, all three of our broad stock market indices (DOW, S&P 500, NASDAQ) have been edging back down a bit. We enter a new strong reversal zone next week (April 4 - April 20). If these indices fall into this time frame, we will watch for support near those targets that I suggested in my last blog for a modest correction (around 33,600 in the DOW, 4,300 in the S&P 500, and 13,500 in the NASDAQ). If these target areas hold, they could be good buy spots for another rally to challenge the all-time highs in these indices. If instead we see a rally into the new reversal zone, we may have to wait a little longer for a corrective drop from a top in this time frame to those targets.
We should note here that it's still possible that the all-time highs in November (NASDAQ) and January (DOW and S&P 500) are the final long-term cycle tops, and that a severe long-term cycle correction is already underway. A rally to challenge those highs over the next several weeks would question that, and a clear break to new all-time highs by ALL THREE indices would suggest that a severe correction has been averted. We will remain on the sidelines for now and watch for a possible buy spot in those target areas.
In Monday's blog on gold and silver, I mentioned that we are nearing the end of the current medium-term cycles in both metals and that we are seeing a final sub-cycle rally in these cycles before the final sharp drop to the cycle bottom. I wrote:
"We were planning on selling short at the sub-cycle top around $2050 in gold and $26.50 in silver, but we may not get to do that if the corrections have already started from last week's tops. Let's wait and see if prices can push higher and closer to our targets this week or next and perhaps give us a bearish divergence signal (gold or silver making a new high without the other). That would be an ideal signal to sell short."
Well, prices dropped dramatically in both metals on Monday and Tuesday but recovered a bit yesterday and today. The final tops to these medium-term cycles may already be in with the highs from earlier this month, and prices may be headed south now. If prices can rally from here into next week's reversal zone, we might still get a chance to sell short if one metal makes a new high without the other (bearish divergence). Otherwise, we will just wait for the final cycle bottoms which could end up in this reversal zone or another one specifically for gold and silver coming up April 12 - 20. We will remain on the sidelines of the precious metals for now.
Crude oil prices continued their roller coaster ride this week with large surges up and down. Because of the ongoing Russia/Ukraine war, crude prices are very volatile, and this is an unsafe market to trade at the moment. President Biden today ordered the release of 1 million barrels of oil per day from the nation's strategic petroleum reserve for six months to help curb rising fuel prices. This caused crude prices to drop significantly, but of course, they may not stay down considering the volatile nature of the market right now. As I stated in Monday's blog, we are waiting for the final bottom in crude's current and old medium-term cycle with a target around $85 - $90. That bottom might be a good spot to buy. We also can't rule out another surge up before the final bottom. We will remain on the sidelines of crude for now.
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