MARKETS UPDATE (11:30 pm EST)
In last Thursday's blog on the broad stock market I stated:
"It seems like a new medium-term cycle started with the recent lows on Jan. 13 in the DOW and S&P 500, although there's still a chance a new cycle began on Nov. 4 in both indices. In both cases, a sub-cycle crest is due soon (probably this week or next) which should be followed by a significant sub-cycle correction over 3-8 days...
To maintain a bullish trend, I would ideally want to see all three indices make new all-time highs either this week or next."
Well, only one index - the S&P 500 - gave us a new all-time high this week. The NASDAQ has been relatively flat, and the DOW has been trending down. This gives us another bearish divergence signal. It's still hard to tell if these indices are ready to roll over. If they do that now, we could see a significant sell-off into our next two back-to-back general reversal zones - one coming up tomorrow (Feb. 21 - March 3) and then a second (stronger) one coming up March 3 - 18). Such a roll over would tell us that the cycle trend is turning bearish.
On the other hand, if the DOW can push up to a new all-time high into next week (perhaps with one or both of the other two indices), we could get a significant top in a reversal zone. Yes, that top would soon be followed by a correction down, but the new all-time highs would confirm the bullish cycle trend, and we would probably want to buy the bottom of any correction - as long as it stays above the lows of Jan. 13. We will stay on the sidelines of this market until the trend - bullish or bearish - can be confirmed.
Gold and silver prices continue to push higher this week with gold making yet a new all-time high today at $2954. We note, however, that silver is still below its high from last week ($33.34) and also below its $34.85 high from Oct. 2024. This gives us a bearish divergence signal between these metals. A correction down could be imminent, especially as we enter a new reversal zone tomorrow. We are still looking to buy any corrective drops in both metals, as long as they don't go TOO low. We are currently on the sidelines of both metals.
Crude oil prices are rising this week which is good news for our long position (entered on Jan. 24). We're still a bit in the red with this trade, but prices are now closing above the 15-day and 45-day moving averages, and this market's trend looks bullish. We need to see prices start closing above $74 and eventually above $78 to confirm a bullish cycle. I am holding my long position in crude for now.
In last Thursday's blog on the broad stock market I stated:
"It seems like a new medium-term cycle started with the recent lows on Jan. 13 in the DOW and S&P 500, although there's still a chance a new cycle began on Nov. 4 in both indices. In both cases, a sub-cycle crest is due soon (probably this week or next) which should be followed by a significant sub-cycle correction over 3-8 days...
To maintain a bullish trend, I would ideally want to see all three indices make new all-time highs either this week or next."
Well, only one index - the S&P 500 - gave us a new all-time high this week. The NASDAQ has been relatively flat, and the DOW has been trending down. This gives us another bearish divergence signal. It's still hard to tell if these indices are ready to roll over. If they do that now, we could see a significant sell-off into our next two back-to-back general reversal zones - one coming up tomorrow (Feb. 21 - March 3) and then a second (stronger) one coming up March 3 - 18). Such a roll over would tell us that the cycle trend is turning bearish.
On the other hand, if the DOW can push up to a new all-time high into next week (perhaps with one or both of the other two indices), we could get a significant top in a reversal zone. Yes, that top would soon be followed by a correction down, but the new all-time highs would confirm the bullish cycle trend, and we would probably want to buy the bottom of any correction - as long as it stays above the lows of Jan. 13. We will stay on the sidelines of this market until the trend - bullish or bearish - can be confirmed.
Gold and silver prices continue to push higher this week with gold making yet a new all-time high today at $2954. We note, however, that silver is still below its high from last week ($33.34) and also below its $34.85 high from Oct. 2024. This gives us a bearish divergence signal between these metals. A correction down could be imminent, especially as we enter a new reversal zone tomorrow. We are still looking to buy any corrective drops in both metals, as long as they don't go TOO low. We are currently on the sidelines of both metals.
Crude oil prices are rising this week which is good news for our long position (entered on Jan. 24). We're still a bit in the red with this trade, but prices are now closing above the 15-day and 45-day moving averages, and this market's trend looks bullish. We need to see prices start closing above $74 and eventually above $78 to confirm a bullish cycle. I am holding my long position in crude for now.
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