We are now past our strong reversal zone for equities (it ended yesterday), and none of our three market indices (DOW, S&P 500, NASDAQ) made new all-time highs within it. We may see these markets continue down from here, but I suspect we could see more rallying into our next reversal zone coming up next week. Another new all-time high in the S&P 500 and/or the DOW without a new all-time high in the NASDAQ sometime in the second half of this month would be an ideal top to sell short the broad stock market. If the market doesn't fall from here, we will watch for that top over the next several weeks as it could very well be the final top that signals a major long-term corrective plunge. We are still on the sidelines of this market.
We had been expecting a correction in gold and silver prices, and we got that today as both metals dropped significantly. We will wait and see if they can get closer to our target prices around $1835 in gold and $26.25 in silver before we consider going long. Still on the sidelines of gold and silver.
In Tuesday's blog on the U.S. Dollar Index I wrote:
"An ideal scenario now for our trading in gold and silver would be to see the dollar rally from this 89-90 support line and push the metal prices down to our targets."
That may be happening now as the greenback surged up to 90.55 today. Let's see if it can rally a bit more and get the precious metals close to our target prices.
Crude oil pushed to a new high of $69.40 today - just outside our previous reversal zone. Unless it falls from here, this suggests crude will rally some more into our next reversal zone specifically for crude June 15 -23. There is some resistance at $70, but if prices can break that, we could see them go as high as $75 over the next few weeks. Although this market is looking bullish, it is a bit late to be chasing this rally. Any significant correction down, however, might give us an opportunity to go long. We will remain on the sidelines of crude for now.