CRUDE OIL TRADE ALERT and BROAD STOCK MARKET UPDATE (11:00 pm EST)
The broad stock market continues to make new all-time highs and continues to look bullish, but it is important to note that it is VERY late in a long-term 18-year cycle (it is the 16th year), and that means the cycle could peak ANY TIME now and begin a sharp correction that could give us a loss of 35 - 67% in the DOW. Furthermore, there may be a 90-year cycle, where the bottom occurs simultaneously with the 18-year cycle. If that is the case, we could see an even greater correction (possibly 80% - 90%). With all of that said, the rise to the final top could go parabolic before falling, and certain technical parameters and shorter-term cycles seem to suggest this market has more rallying to do before any big correction. With more rate cuts expected this year and next, the stage seems set for new all-time highs.
The DOW most likely started a new medium-term cycle with its low on Sept. 2 (44,948), and it looks like its first significant sub-cycle correction came on Oct.10, which was near the center of our last reversal zone. From there, it climbed to a new all-time high this week on Tuesday. The S&P 500 and NASDAQ both began new medium-term cycles either on Aug. 1 or Aug. 20, but their steep drops on Oct. 10 were only for one day. A normal sub-cycle correction usually lasts at least 2-3 days, so these two indices could be ready to push lower. The fact that they have not made new all-time highs this week, and the DOW has, gives us another bearish divergence signal, suggesting all three could now fall lower. As long as any correction doesn't go TOO low, we will probably want to buy any significant sub-cycle drop. For now, we remain on the sidelines of this market.
Crude oil prices soared today after the U.S. imposed sanctions on major Russian suppliers over Moscow's war in Ukraine. This was good news, as I've been holding my long position in crude despite prices breaking below my recent stop-loss points. Prices were holding near strong support levels, and I suspected they would turn up as we were in a strong general reversal zone as well as a reversal zone specifically for crude. The bottom came on Monday at $56. This surge in price could just be a "flash in the pan", especially since the current medium-term cycle trend is now bearish. For this reason, I am going to unload my long position at tomorrow's market open. Today's closing price was close to my buy price on Aug. 27, so I should almost break even on the trade. I believe most traders got out of their longs at earlier stop loss points I suggested, but if not, now would be a good time to sell any long positions.
The broad stock market continues to make new all-time highs and continues to look bullish, but it is important to note that it is VERY late in a long-term 18-year cycle (it is the 16th year), and that means the cycle could peak ANY TIME now and begin a sharp correction that could give us a loss of 35 - 67% in the DOW. Furthermore, there may be a 90-year cycle, where the bottom occurs simultaneously with the 18-year cycle. If that is the case, we could see an even greater correction (possibly 80% - 90%). With all of that said, the rise to the final top could go parabolic before falling, and certain technical parameters and shorter-term cycles seem to suggest this market has more rallying to do before any big correction. With more rate cuts expected this year and next, the stage seems set for new all-time highs.
The DOW most likely started a new medium-term cycle with its low on Sept. 2 (44,948), and it looks like its first significant sub-cycle correction came on Oct.10, which was near the center of our last reversal zone. From there, it climbed to a new all-time high this week on Tuesday. The S&P 500 and NASDAQ both began new medium-term cycles either on Aug. 1 or Aug. 20, but their steep drops on Oct. 10 were only for one day. A normal sub-cycle correction usually lasts at least 2-3 days, so these two indices could be ready to push lower. The fact that they have not made new all-time highs this week, and the DOW has, gives us another bearish divergence signal, suggesting all three could now fall lower. As long as any correction doesn't go TOO low, we will probably want to buy any significant sub-cycle drop. For now, we remain on the sidelines of this market.
Crude oil prices soared today after the U.S. imposed sanctions on major Russian suppliers over Moscow's war in Ukraine. This was good news, as I've been holding my long position in crude despite prices breaking below my recent stop-loss points. Prices were holding near strong support levels, and I suspected they would turn up as we were in a strong general reversal zone as well as a reversal zone specifically for crude. The bottom came on Monday at $56. This surge in price could just be a "flash in the pan", especially since the current medium-term cycle trend is now bearish. For this reason, I am going to unload my long position at tomorrow's market open. Today's closing price was close to my buy price on Aug. 27, so I should almost break even on the trade. I believe most traders got out of their longs at earlier stop loss points I suggested, but if not, now would be a good time to sell any long positions.
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