MARKETS UPDATE (11:30 pm EDT)
After a few days relief rally, the broad stock market turned back down strongly today. It looks like equities may be resuming their plunge down to a final medium-term cycle bottom which is ideally due anytime between now and Sept. 8th. We are still looking for price targets around 33,500 in the DOW and 4,200 in the S&P 500, but because all three market indices (DOW, S&P 500, NASDAQ) have now gone well below their 45-day moving averages, we can accept a bottom above (or below) these targets as long as it is inside our current reversal zone (Aug.23 - Sept. 8). The DOW is already breaking below last Friday's low. Let's stay short in this market for now and see if the other two indices will follow. If they don't, we may have a bullish divergence signal for the week.
Gold and silver prices have been rallying sharply from last week's lows, but they may also be ready to turn back down as they are both making new weekly highs as we approach the center of a reversal zone specifically for the precious metals (Aug. 21 - Sept. 5). Silver's rally has been especially strong, but today and tomorrow (Friday) is also a potential pivot point for silver. Today and yesterday (Wednesday) was/is a strong potential pivot point for gold. A top could therefore be imminent in both metals. We are still uncertain about the medium-term cycle labeling of gold. If silver started a new medium-term cycle with its low on June 23 ($22.12), then it has to break above $25.26 to maintain a bullish trend. Gold's trend could be bullish or bearish depending on its cycle labeling. We are staying on the sidelines of both metals until their cycle labeling is more clear.
Crude oil prices are now approaching the 45-day moving average, and we expect a final bottom in its medium-term cycle to test or break below that average anytime by Sept. 8. We remain on the sidelines of crude as we wait for that bottom.
After a few days relief rally, the broad stock market turned back down strongly today. It looks like equities may be resuming their plunge down to a final medium-term cycle bottom which is ideally due anytime between now and Sept. 8th. We are still looking for price targets around 33,500 in the DOW and 4,200 in the S&P 500, but because all three market indices (DOW, S&P 500, NASDAQ) have now gone well below their 45-day moving averages, we can accept a bottom above (or below) these targets as long as it is inside our current reversal zone (Aug.23 - Sept. 8). The DOW is already breaking below last Friday's low. Let's stay short in this market for now and see if the other two indices will follow. If they don't, we may have a bullish divergence signal for the week.
Gold and silver prices have been rallying sharply from last week's lows, but they may also be ready to turn back down as they are both making new weekly highs as we approach the center of a reversal zone specifically for the precious metals (Aug. 21 - Sept. 5). Silver's rally has been especially strong, but today and tomorrow (Friday) is also a potential pivot point for silver. Today and yesterday (Wednesday) was/is a strong potential pivot point for gold. A top could therefore be imminent in both metals. We are still uncertain about the medium-term cycle labeling of gold. If silver started a new medium-term cycle with its low on June 23 ($22.12), then it has to break above $25.26 to maintain a bullish trend. Gold's trend could be bullish or bearish depending on its cycle labeling. We are staying on the sidelines of both metals until their cycle labeling is more clear.
Crude oil prices are now approaching the 45-day moving average, and we expect a final bottom in its medium-term cycle to test or break below that average anytime by Sept. 8. We remain on the sidelines of crude as we wait for that bottom.
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