GOLD TRADE ALERT and MARKETS UPDATE (1:45 pm EST)
As I've been saying over the last several weeks, all markets are extremely volatile now and this increases the likelihood of unexpected, abrupt surges up or down that can throw off normal cycle and technical analysis. Unfortunately we are seeing that now along with the possibility of an overall meltdown in equity markets and panic driven trading in all markets.
Gold is surging up into what looks like a "blow-off" top, but also what could be a major breakout and bullish trend shift. I suggested a stop loss area around $1200 - $1250 in Monday's trade alert for our short position from the $1200 level. Any traders who haven't been stopped out already should cover that short position now. Yes, there is still the possibility of a sudden correction down between now and next Wednesday, but prices could also surge higher before that happens so I consider it safer to step aside now. Covering (unloading) my short position in gold today (still out of silver).
The broad stock market is falling heavily today, and at the time of this writing (1:30 pm EST) the DOW is down over 300 points. Janet Yellen's somewhat hawkish comments yesterday were not appreciated by Wall Street investors as they were probably expecting the Fed to scale back its plan to raise interest rates this year. Wall Street's displeasure has intensified today, but Janet Yellen is continuing her testimony to the Senate Banking Committee for a second day. Some are hoping she will be a bit more dovish in her rhetoric to help calm an obviously nervous stock market.
We are at the end of a strong reversal zone for the broad stock market today, and the cycle pattern is still unclear. Feb.17-25 is another (weaker) reversal zone so it is possible that could be the time frame for a significant turning point. If the market continues to fall past this week, however, we could be seeing the start of a major breakdown in equities. In the S&P 500 we don't want to see a break and close below 1800 which is a major support line. If we do, these markets could be in big trouble. Today the S&P 500 is getting down to 1812 so we are close. Perhaps Ms. Yellen's testimony today will help calm Wall Street investors. Still on the sidelines of the broad stock market.
Crude oil prices have now breached our second stop loss point at $27.56 so many traders are probably stopped out by now. I am being a little stubborn in holding my long position here because crude's cycle pattern clearly shows that we are very close to a medium-term, and maybe even a longer-term cycle low that should bottom in the $24 - $27 area either now (within the current reversal zone) or possibly early March at the latest. If the stock market stabilizes now, crude prices may find a bottom today, but if both continue lower into next week, I may be forced to bail out of my long position and wait several more weeks for a final cycle bottom. Traders who are risk adverse may wish to get out now (if they haven't done so already based on the two stop loss points mentioned above) or just hold a small amount of money in this trade. Holding my long position in crude for now.
As I've been saying over the last several weeks, all markets are extremely volatile now and this increases the likelihood of unexpected, abrupt surges up or down that can throw off normal cycle and technical analysis. Unfortunately we are seeing that now along with the possibility of an overall meltdown in equity markets and panic driven trading in all markets.
Gold is surging up into what looks like a "blow-off" top, but also what could be a major breakout and bullish trend shift. I suggested a stop loss area around $1200 - $1250 in Monday's trade alert for our short position from the $1200 level. Any traders who haven't been stopped out already should cover that short position now. Yes, there is still the possibility of a sudden correction down between now and next Wednesday, but prices could also surge higher before that happens so I consider it safer to step aside now. Covering (unloading) my short position in gold today (still out of silver).
The broad stock market is falling heavily today, and at the time of this writing (1:30 pm EST) the DOW is down over 300 points. Janet Yellen's somewhat hawkish comments yesterday were not appreciated by Wall Street investors as they were probably expecting the Fed to scale back its plan to raise interest rates this year. Wall Street's displeasure has intensified today, but Janet Yellen is continuing her testimony to the Senate Banking Committee for a second day. Some are hoping she will be a bit more dovish in her rhetoric to help calm an obviously nervous stock market.
We are at the end of a strong reversal zone for the broad stock market today, and the cycle pattern is still unclear. Feb.17-25 is another (weaker) reversal zone so it is possible that could be the time frame for a significant turning point. If the market continues to fall past this week, however, we could be seeing the start of a major breakdown in equities. In the S&P 500 we don't want to see a break and close below 1800 which is a major support line. If we do, these markets could be in big trouble. Today the S&P 500 is getting down to 1812 so we are close. Perhaps Ms. Yellen's testimony today will help calm Wall Street investors. Still on the sidelines of the broad stock market.
Crude oil prices have now breached our second stop loss point at $27.56 so many traders are probably stopped out by now. I am being a little stubborn in holding my long position here because crude's cycle pattern clearly shows that we are very close to a medium-term, and maybe even a longer-term cycle low that should bottom in the $24 - $27 area either now (within the current reversal zone) or possibly early March at the latest. If the stock market stabilizes now, crude prices may find a bottom today, but if both continue lower into next week, I may be forced to bail out of my long position and wait several more weeks for a final cycle bottom. Traders who are risk adverse may wish to get out now (if they haven't done so already based on the two stop loss points mentioned above) or just hold a small amount of money in this trade. Holding my long position in crude for now.
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