MARKETS UPDATE (4:22 pm EDT)
The DOW seems to be flirting with the 18,000 level this week. It rose above there on Tuesday but then closed below. It closed above 18,000 yesterday, but it opened below today, dropped to 17,920 by noon, crawled back up and attempted another breakthrough but failed and closed the day at 17,985 with a 20 point loss. This market obviously has buoyant energy, but both the DOW and S&P 500 are pushing against strong resistance levels. We are also in a reversal zone, and the cycle structures tell us that some sort of correction is due soon. Today is technically the last day of the current reversal zone, and the next one is at the end of the month so ideally the broad stock market would turn down now and make a corrective bottom (possibly a modest one) in late June or early July. The Fed (and others), however, are most likely working hard to keep markets bullish into the upcoming presidential election, and we may not get an "ideal" correction. We still have a strong intermarket bearish divergence signal as long as the DOW remains below 18,167, and that is the stop loss for our current short position in this market. Holding my short position in the broad stock market for now.
In Monday's blog on gold and silver I wrote:
" If gold continues to rally into the end of this week or early next week and stays under $1,290, we may have a good spot to sell short for a final correction into the end of the month. There is a possibility, however, that gold ...could be very bullish now and any rally... (could) ... exceed $1,300. Silver's situation is similar to gold's and silver may also rally now, but if that rally stalls later this week or early next week, prices could fall again into a corrective low."
Gold and silver are indeed rallying this week, and today's spot price in gold got up to $1,270. Monday next week is the center point of a reversal zone specifically related to precious metals, and there are other technical signals that point to a sharp decline early next week. If gold can stay under $1,300 over the next few trading days, we may have a good opportunity to sell short both gold and silver. One cautionary note here is that the gold and silver mining company indices HUI and XAU recently turned 100% bullish. As I've mentioned before on this site, gold and silver mining company stocks are often a bellwether for the price of the metals themselves. This is suggesting that the overall trend of these metals is shifting to bullish; however, we could still see a cycle correction (possibly a modest one) before a strong rally gets underway. Stay tuned for more updates. Currently on the sidelines of gold and silver.
In Monday's blog on crude oil I wrote:
"Next week is another reversal zone specifically for crude so it's possible prices could make a double top to last week's high or even make a new high into that time. We will try and maintain a stop loss for our current short position in crude around $51, but I may tolerate a slightly higher price, especially as we approach next week's reversal zone."
Crude prices are making new highs as we approach next week's reversal zone. Today crude touched $51.67 before falling and closing at $50.55 (July contract chart) so we are still below $51. I am going to try and hold my short position into next week as timing and cycle factors are pointing to an imminent reversal, and we are in the target range for a top. Holding my short position in crude.
The DOW seems to be flirting with the 18,000 level this week. It rose above there on Tuesday but then closed below. It closed above 18,000 yesterday, but it opened below today, dropped to 17,920 by noon, crawled back up and attempted another breakthrough but failed and closed the day at 17,985 with a 20 point loss. This market obviously has buoyant energy, but both the DOW and S&P 500 are pushing against strong resistance levels. We are also in a reversal zone, and the cycle structures tell us that some sort of correction is due soon. Today is technically the last day of the current reversal zone, and the next one is at the end of the month so ideally the broad stock market would turn down now and make a corrective bottom (possibly a modest one) in late June or early July. The Fed (and others), however, are most likely working hard to keep markets bullish into the upcoming presidential election, and we may not get an "ideal" correction. We still have a strong intermarket bearish divergence signal as long as the DOW remains below 18,167, and that is the stop loss for our current short position in this market. Holding my short position in the broad stock market for now.
In Monday's blog on gold and silver I wrote:
" If gold continues to rally into the end of this week or early next week and stays under $1,290, we may have a good spot to sell short for a final correction into the end of the month. There is a possibility, however, that gold ...could be very bullish now and any rally... (could) ... exceed $1,300. Silver's situation is similar to gold's and silver may also rally now, but if that rally stalls later this week or early next week, prices could fall again into a corrective low."
Gold and silver are indeed rallying this week, and today's spot price in gold got up to $1,270. Monday next week is the center point of a reversal zone specifically related to precious metals, and there are other technical signals that point to a sharp decline early next week. If gold can stay under $1,300 over the next few trading days, we may have a good opportunity to sell short both gold and silver. One cautionary note here is that the gold and silver mining company indices HUI and XAU recently turned 100% bullish. As I've mentioned before on this site, gold and silver mining company stocks are often a bellwether for the price of the metals themselves. This is suggesting that the overall trend of these metals is shifting to bullish; however, we could still see a cycle correction (possibly a modest one) before a strong rally gets underway. Stay tuned for more updates. Currently on the sidelines of gold and silver.
In Monday's blog on crude oil I wrote:
"Next week is another reversal zone specifically for crude so it's possible prices could make a double top to last week's high or even make a new high into that time. We will try and maintain a stop loss for our current short position in crude around $51, but I may tolerate a slightly higher price, especially as we approach next week's reversal zone."
Crude prices are making new highs as we approach next week's reversal zone. Today crude touched $51.67 before falling and closing at $50.55 (July contract chart) so we are still below $51. I am going to try and hold my short position into next week as timing and cycle factors are pointing to an imminent reversal, and we are in the target range for a top. Holding my short position in crude.
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