Volatility remains high in equity markets today with the DOW rising over 300 points at the time of this writing
(3:15 pm EST). We can now confirm Tuesday as the reversal point for this market (unless the DOW plunges below Tuesday's 17,262 low tomorrow - highly unlikely) which means we should be looking to go long now. I am reluctant, however, to buy at the top of today's surge, especially since the December jobs report is being released tomorrow and there is a lot of conflicting speculation on what these numbers will be. Payroll processor ADP is estimating around 240,000 new jobs for December, but some analysts feel that this number is too low and that Friday's report will be closer to 300,000. Others are more conservative and are saying the numbers will be disappointingly below ADP's estimate. Lately Wall Street has been cheering any positive news about the economy, but since the Federal Reserve has consistently been saying that the time to raise interest rates will depend on how well the economy is doing, any good economic news now might spook investors with fears of an early rate hike. It may be wise to wait until next week before trading this (or any) market as trading volume is still relatively low and volatility remains high. Still on the sidelines.
Crude oil's low at 46.83 yesterday may be the cycle bottom we've been waiting for. If that low holds and prices can now close above $51 we may have a good spot to buy shortly. On the sidelines for now.
Gold and silver prices have been backing down a bit from their highs on Tuesday. This market still appears a bit ambiguous with conflicting technical signals. Gold's low of Jan. 2 and the high of Jan. 6 could both qualify as market turning points so directional momentum is unclear at the moment. As with the other markets, it may be best to put off any trading here until next week. The U.S. Dollar Index is pushing to yet a new high above 92 today with its directional momentum remaining 100% bullish. This strength in the dollar has been putting downward pressure on precious metal prices, but the dollar is extremely overbought now and overdue for a correction so this bearish force on gold and silver may not last much longer. On the sidelines of gold and silver.