MARKETS UPDATE (11:00 pm EST)
Despite several bearish technical signals early this week, the broad stock market has been rallying strongly off Monday's lows. Monday was not inside any reversal zone, so the chances of this being a major turning point are slim (but not impossible). Right now, the DOW is very close to making a new all-time high while the S&P 500 and NASDAQ have a little more distance to cover before doing that. If the DOW does make a new all-time high without the other two (or even one) indices, it will give us yet another bearish divergence signal and a reason for this market to fall. On the other hand, if all three indices can make new all-time highs we could see a bullish "breakout" and more rallying - at least until the first week of March when we encounter another strong general reversal zone (March 3 - 18). I am remaining on the sidelines of this market for now.
Gold prices pushed higher this week and made a new all-time high ($2880) on Wednesday. This high was outside any reversal zone. A sub-cycle correction is due (even overdue) in this market anytime now, but because there are no reversal zones for the rest of this month, prices could continue to rally with only minor corrective dips. The medium-term cycle may distort under these circumstances. I am staying on the sidelines of this metal until a significant correction gives us a good opportunity to buy.
Silver also rallied this week, and prices are testing the Dec. 12 high of $32.31. This is suggesting the medium-term cycle started with the "double-bottom" lows on Dec. 19 and Dec. 31. As with gold, a sub-cycle correction is due and could happen anytime. Any moderate correction that holds above $30 may be a good spot to buy. I am still on the sidelines of silver.
My long position in crude oil (entered on Jan. 24) is being tested again this week. Last week a support line at $72 (March contract chart) held, but this week that support broke, and prices have also breached the 45-day moving average. There is another strong support area just above $70. Tomorrow is the last day of a reversal zone specifically for crude, so if prices are going to turn up they need to do that NOW to maintain the idea that this cycle is still bullish.
I am still holding my long position in crude.
Despite several bearish technical signals early this week, the broad stock market has been rallying strongly off Monday's lows. Monday was not inside any reversal zone, so the chances of this being a major turning point are slim (but not impossible). Right now, the DOW is very close to making a new all-time high while the S&P 500 and NASDAQ have a little more distance to cover before doing that. If the DOW does make a new all-time high without the other two (or even one) indices, it will give us yet another bearish divergence signal and a reason for this market to fall. On the other hand, if all three indices can make new all-time highs we could see a bullish "breakout" and more rallying - at least until the first week of March when we encounter another strong general reversal zone (March 3 - 18). I am remaining on the sidelines of this market for now.
Gold prices pushed higher this week and made a new all-time high ($2880) on Wednesday. This high was outside any reversal zone. A sub-cycle correction is due (even overdue) in this market anytime now, but because there are no reversal zones for the rest of this month, prices could continue to rally with only minor corrective dips. The medium-term cycle may distort under these circumstances. I am staying on the sidelines of this metal until a significant correction gives us a good opportunity to buy.
Silver also rallied this week, and prices are testing the Dec. 12 high of $32.31. This is suggesting the medium-term cycle started with the "double-bottom" lows on Dec. 19 and Dec. 31. As with gold, a sub-cycle correction is due and could happen anytime. Any moderate correction that holds above $30 may be a good spot to buy. I am still on the sidelines of silver.
My long position in crude oil (entered on Jan. 24) is being tested again this week. Last week a support line at $72 (March contract chart) held, but this week that support broke, and prices have also breached the 45-day moving average. There is another strong support area just above $70. Tomorrow is the last day of a reversal zone specifically for crude, so if prices are going to turn up they need to do that NOW to maintain the idea that this cycle is still bullish.
I am still holding my long position in crude.
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