MARKETS UPDATE (11:30 pm EDT)
I apologize for not posting for two weeks. I did have my eye on the markets, but I was occupied with some personal business, and there was no critical need for any updates.
The most significant thing that has happened over these two weeks is that all three indices in the broad stock market (DOW, S&P 500, NASDAQ) have turned bearish. These three indices most likely started their current medium-term cycles on Jan. 13. After rising from there for two weeks (DOW), four weeks (S&P 500), and only one week (NASDAQ), these indices made "double-top" highs to their previous medium-term cycles and then fell precipitously. The fall has not abated, and all three indices are now well below the Jan.13 start of their cycles. This means the current medium-term cycles are officially bearish and should continue lower to the end of their cycles 7 - 16 weeks from now.
This market was quite overbought and ripe for a significant correction. Under such circumstances, anything upsetting market stability can trigger a sell-off. The recent on again/off again tariffs imposed by President Trump has made Wall Street very nervous, so the current market plunge is not surprising - especially as our cycle analysis was also predicting a major correction this year. It looks like that correction is coming sooner rather than later in the year.
Despite this dire outlook (bearish), a sub-cycle low is now due in all three indices, and new lows are being made inside our current strong general reversal zone (March 3 - 18, a long one). We should therefore expect some sort of relief rally soon, but that rally may not get very far before turning back down again. Our trading strategy is now BEARISH, which means we will most likely be looking to sell short at the top of any significant rallies.
I am remaining on the sidelines of this market for now.
Crude oil prices seem to be stabilizing and finding support around $66 (April contract chart) inside the above mentioned general reversal zone, so a rally may be imminent. I am still holding my long position in crude for now.
Gold and silver prices have been rallying and making new highs, but these highs are happening inside the general reversal zone as well as a reversal zone specifically for the precious metals that ends tomorrow (Friday). A top could be imminent, and both metals could roll over and start heading south again. I am still on the sidelines of both metals as we wait for a significant corrective low to buy.
I apologize for not posting for two weeks. I did have my eye on the markets, but I was occupied with some personal business, and there was no critical need for any updates.
The most significant thing that has happened over these two weeks is that all three indices in the broad stock market (DOW, S&P 500, NASDAQ) have turned bearish. These three indices most likely started their current medium-term cycles on Jan. 13. After rising from there for two weeks (DOW), four weeks (S&P 500), and only one week (NASDAQ), these indices made "double-top" highs to their previous medium-term cycles and then fell precipitously. The fall has not abated, and all three indices are now well below the Jan.13 start of their cycles. This means the current medium-term cycles are officially bearish and should continue lower to the end of their cycles 7 - 16 weeks from now.
This market was quite overbought and ripe for a significant correction. Under such circumstances, anything upsetting market stability can trigger a sell-off. The recent on again/off again tariffs imposed by President Trump has made Wall Street very nervous, so the current market plunge is not surprising - especially as our cycle analysis was also predicting a major correction this year. It looks like that correction is coming sooner rather than later in the year.
Despite this dire outlook (bearish), a sub-cycle low is now due in all three indices, and new lows are being made inside our current strong general reversal zone (March 3 - 18, a long one). We should therefore expect some sort of relief rally soon, but that rally may not get very far before turning back down again. Our trading strategy is now BEARISH, which means we will most likely be looking to sell short at the top of any significant rallies.
I am remaining on the sidelines of this market for now.
Crude oil prices seem to be stabilizing and finding support around $66 (April contract chart) inside the above mentioned general reversal zone, so a rally may be imminent. I am still holding my long position in crude for now.
Gold and silver prices have been rallying and making new highs, but these highs are happening inside the general reversal zone as well as a reversal zone specifically for the precious metals that ends tomorrow (Friday). A top could be imminent, and both metals could roll over and start heading south again. I am still on the sidelines of both metals as we wait for a significant corrective low to buy.
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