As we move close to the center of our new reversal zone for the broad stock market (March 12 - 21), both the S&P 500 and NASDAQ are making new highs for the month while the DOW is not, so we now have an intermarket bearish divergence signal. This is in addition to a bullish divergence signal we got on Monday (as the DOW made a new low and the S&P 500 and NASDAQ did not). The DOW is now halfway between its Feb. 25 high (26,241) and Monday's low (25,208) and is balanced between two opposing signals. There is still time for this index to make a steep sub-cycle correction, but if it does, it has to drop now as the bottom would be due this week (or early next week - probably close to 25,000 or lower). It's also possible that Monday's low of 25,208 was already the sub-cycle bottom. If that's the case then this index is going up, and we will wait for any modest dip to buy. For now, let's stay on the sidelines and see if this index can push lower over the next few trading days to give us a better spot to go long.
The DOW's directional momentum is currently 100% bearish while the S&P 500 and NASDAQ are nearly 100% bullish (which is unusual). This is why I am focusing on the DOW for a low to buy. Nevertheless, these other two indices are making new highs in a reversal zone, and we now have a bearish divergence signal against the DOW which means they could also fall sharply into a sub-cycle bottom sometime next week. We will also watch these two indices for lows to buy.
Gold and silver prices are falling sharply today from yesterday's new weekly highs. Ideally, we would now like to see silver make a new monthly low (i.e. below $14.90) by next Thursday with gold staying above its monthly low of $1281. That would give us bullish divergence and a signal to buy. Gold breaking its low with silver staying above $14.90 would also be an acceptable buy signal, but we don't want to see both metals making new lows as that could be a bearish warning of a deeper drop in prices. Holding my long position in gold and still on the sidelines of silver.