The Alternative Investor
  • Home
  • TRADING BLOG
  • Current Positions
  • Alternative Investor Strategy
  • ETFs
  • About Alternative Investor
  • Contact

Trading Blog          Thursday,  May 21,  2015

5/21/2015

 
MARKETS  UPDATE  (6:00 pm EDT)

Yesterday the FOMC officially released the minutes to its April meeting which indicated that the Fed is unlikely to raise interest rates in June. This came as no surprise to most financial analysts who are now anticipating a September rate hike, and especially to those growing number of analysts who believe that the Fed will postpone the first hike into 2016. Foreign investors in the U.S. Dollar are starting to realize that the Fed could delay a rate hike for some time, and this could be the big reason for the dollar's recent breakdown. The DOW rose a bit in the afternoon on the "good news" but then closed the day flat indicating that the broad stock market has likely already factored in a delayed hike. The DOW's new high on Tuesday could be a turning point for a significant correction now as we are in a strong reversal zone. This is supported by the fact that the NASDAQ still has not made a new monthly high (intermarket bearish divergence). There is still time, however, for the DOW to push higher before correcting to the bottom of its current cycle (due any time by the end of June), and the NASDAQ is very close to a new high. If the NASDAQ can break above 5120, we may have to wait until the end of May or early June to sell short on new highs. Directional momentum is still strongly bullish in the DOW, S&P 500 and NASDAQ which supports this view of more rallying. Because the market direction is still unclear, I am remaining on the sidelines until a stronger sell signal appears, which should be soon.

In addition to being a time zone for likely market reversals, the four week period from May 18 - June 12 may also be a time of high market volatility (due to a phenomenon in financial astrology known as "Mercury retrograde" which has been statistically correlated with frequent price swings in all markets). We should therefore be on guard for sudden and unexpected price moves over the next several weeks. One is already happening in the precious metals this week.  Gold made a new high on Monday ($1232) which was barely within our target range of $1230 - $1250 (or higher) and was a little early in our timing zone for a reversal; nevertheless, a sharp reversal is now unfolding.  Silver prices are also reversing and falling sharply. A cycle pattern is manifesting here which usually takes the form of a steep but brief drop quickly followed by a steep rally to a new high and then a final substantial drop. The end of this week through early next week is the strongest part of the current reversal zone for gold and silver. If these metals move lower over the next three trading days and gold stays above $1190 and silver above $16, I will consider going long for what could be a strong short-term rally into the first week of June. Stay tuned. On the sidelines of gold and silver for now.

The recent short-term bounce in the U.S. Dollar Index (that I had anticipated in last Thursday's blog) may be close to ending as it approaches resistance at the 96 level. If this index starts to turn down again over the next few days (it certainly is not getting much support from a dovish Fed), it will likely coincide with reversals in gold and silver. We will therefore watch carefully that 96 line of resistance over the next few days.

ISIL's seizure of Ramadi in Iraq last week and the U.S. State Department's acknowledgement of the seriousness of this latest victory by the Islamic militant group is likely stabilizing crude oil prices this week. Prices should now be falling to at least the $52 - $55 area according to the current cycle pattern in crude.  Conflicts in the Middle East are always a "wildcard' factor when trading crude oil, but I am going to maintain my short position here unless prices break clearly above $62.  Note that this is a short-term trade and I will be looking to take profits should the price fall to $55 or lower over the next week or two.






Comments are closed.

    RSS Feed

    Archives

    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012

The Alternative Investor takes no advertising or incentives from any company, institution or investment that is discussed on the website.  Any trading and investing information presented is based on Alternative Investor's independent and unbiased research and analysis of current financial markets.

                                                                                                                                                            LEGAL and DISCLAIMER

All statements and trading/investment information on this website represent solely the personal opinion of The Alternative Investor based on information available at the time of writing and are intended for educational purposes only and are not a recommendation to buy or sell securities, commodities or currencies.  The Alternative Investor is not a licensed broker or financial advisor.  The Alternative Investor presents the trading and investing information on this site in good faith based on his own research into current financial markets but cannot and does not guarantee profit and does not guarantee against any financial losses that result from using this information.  All users of this website and the information presented within it assume full responsibility for their own personal trading/investing decisions and any losses that may result from them.

Trading and investing in any financial market may involve serious risk of loss.  For this reason all traders and investors should never place more money than they can afford to lose in any individual market.  The Alternative Investor monitors several markets and encourages a balanced distribution of funds among them (and others).  The Alternative Investor recommends consulting with a professional financial advisor before making any transactions with financial ramifications.  All trading, investing and financial transactions should always be made in accordance with the appropriate laws and legal regulations in your area of jurisdiction.

The Alternative Investor is an independent researcher and analyst and receives no compensation of any kind from any individuals, groups, companies or institutions discussed on this website.