MARKETS UPDATE (6:15 pm EST)
The broad stock market fell sharply today, and we are entering a time zone where significant market reversals are likely (May 14-28). Could this be the start of the significant correction we've been expecting? Maybe, but some short-term technical indicators are suggesting that this market could push up a bit more into the middle of next week before taking a deeper correction. There is support now for the DOW in the 16,420 -16,450 area which seems to be holding today's plunge. If the DOW breaks and closes below that support tomorrow (Friday) we could see a steep fall into next week. I would prefer to see another top into early next week and then a fall, as this would be the ideal set-up to sell short. Right now directional momentum is still bullish in the DOW and S&P 500 charts and still bearish in some (but not all) of the NASDAQ charts. Strong bearish signals in the DOW and S&P charts will alert us if and when a serious correction is underway. Still on the sidelines.
Over the last several days it had appeared that gold and silver were mounting a significant rally into the second half of this month, but gold seems reluctant to break above the $1300 level, and silver has barely touched its resistance at $20. Both metals are down sharply today. If they continue to fall into next week we could see a significant low to buy into. A significant development in silver charts this week was the appearance of a strong bullish directional signal which now makes directional momentum in both gold and silver mixed bullish and bearish (it had been 100% bearish in silver). This is a good sign that we are nearing a bottom in the precious metals. If instead of falling, prices continue to rally into next week, we could see a reversal then and an extended correction into mid-June. At the moment it appears more likely prices will make a low next week. On the sidelines and waiting to buy.
Crude oil prices backed down today after a strong surge yesterday and closed the day near $101.50. As with the broad stock market, cycle analysis is suggesting an imminent correction in crude. This correction could start now and bottom into next week; however, if prices instead make new highs into next week, we could see the correction begin then. Because of the likelihood of an imminent correction, I am attempting to "ride out" this week's price surge with my short position even though it has broken through my stop loss zone at $100 - $101. The danger here is the possibility of a strong price surge into next week (perhaps fueled by more turmoil in Ukraine), but today's downturn has moderated prices a bit, and we are still close to our short sell price near $100. I am therefore maintaining my short position for now in anticipation of a correction soon. Momentum remains mixed bullish and bearish in this market.
The broad stock market fell sharply today, and we are entering a time zone where significant market reversals are likely (May 14-28). Could this be the start of the significant correction we've been expecting? Maybe, but some short-term technical indicators are suggesting that this market could push up a bit more into the middle of next week before taking a deeper correction. There is support now for the DOW in the 16,420 -16,450 area which seems to be holding today's plunge. If the DOW breaks and closes below that support tomorrow (Friday) we could see a steep fall into next week. I would prefer to see another top into early next week and then a fall, as this would be the ideal set-up to sell short. Right now directional momentum is still bullish in the DOW and S&P 500 charts and still bearish in some (but not all) of the NASDAQ charts. Strong bearish signals in the DOW and S&P charts will alert us if and when a serious correction is underway. Still on the sidelines.
Over the last several days it had appeared that gold and silver were mounting a significant rally into the second half of this month, but gold seems reluctant to break above the $1300 level, and silver has barely touched its resistance at $20. Both metals are down sharply today. If they continue to fall into next week we could see a significant low to buy into. A significant development in silver charts this week was the appearance of a strong bullish directional signal which now makes directional momentum in both gold and silver mixed bullish and bearish (it had been 100% bearish in silver). This is a good sign that we are nearing a bottom in the precious metals. If instead of falling, prices continue to rally into next week, we could see a reversal then and an extended correction into mid-June. At the moment it appears more likely prices will make a low next week. On the sidelines and waiting to buy.
Crude oil prices backed down today after a strong surge yesterday and closed the day near $101.50. As with the broad stock market, cycle analysis is suggesting an imminent correction in crude. This correction could start now and bottom into next week; however, if prices instead make new highs into next week, we could see the correction begin then. Because of the likelihood of an imminent correction, I am attempting to "ride out" this week's price surge with my short position even though it has broken through my stop loss zone at $100 - $101. The danger here is the possibility of a strong price surge into next week (perhaps fueled by more turmoil in Ukraine), but today's downturn has moderated prices a bit, and we are still close to our short sell price near $100. I am therefore maintaining my short position for now in anticipation of a correction soon. Momentum remains mixed bullish and bearish in this market.
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