MARKETS UPDATE (2:30 pm EDST)
The DOW edged a bit higher this morning, but it still has not made a new weekly high while the S&P 500 and NASDAQ have. Our intermarket bearish divergence signal is thus still intact. We are, however, now technically out of our reversal zone (May 5 - 20). Yes, the market could still turn down here, but if it doesn't do so soon, and if prices push higher into next week, we could see more rallying into our next reversal zone in June. Our main short-term strategy now is to wait for a corrective sub-cycle low to buy. We may still try and sell short at a significant top in a reversal zone - probably in June - as long as the trade doesn't look too risky. I am still anticipating a major switch to a bearish strategy (i.e. mostly selling short) once we hit a final top in the current medium-term cycle (or maybe the next one) - probably later this year. As I've said in earlier posts, we could see a new all-time high in the NASDAQ but not necessarily in the DOW and/or S&P 500. The correction from that top may be VERY big and last for some time (possibly into 2021 - 2022). Still on the sidelines of the broad stock market.
Gold made a new weekly high on Monday and silver made a new weekly high yesterday (still in the reversal zone), and both are dropping sharply today. This could be the start of a significant sub-cycle correction. We are still watching for a corrective low to buy as both metals still look quite bullish. Those ideal lows are now around $1690 for gold and $16 in silver. Let's wait and see if prices can get there. On the sidelines of both gold and silver for now.
Crude oil prices have been rallying strongly from what looks like a new medium-term cycle bottom on April 22. Crude could be making its first sub-cycle top now as prices made a new weekly high today at $36.78 (June contract chart). As with the broad stock market, however, today's new high is just outside our reversal zone which means prices could still push higher into the next strong reversal zone (there is one specifically for crude in the second week of June). Let's stay on the sidelines of this market for now.
The DOW edged a bit higher this morning, but it still has not made a new weekly high while the S&P 500 and NASDAQ have. Our intermarket bearish divergence signal is thus still intact. We are, however, now technically out of our reversal zone (May 5 - 20). Yes, the market could still turn down here, but if it doesn't do so soon, and if prices push higher into next week, we could see more rallying into our next reversal zone in June. Our main short-term strategy now is to wait for a corrective sub-cycle low to buy. We may still try and sell short at a significant top in a reversal zone - probably in June - as long as the trade doesn't look too risky. I am still anticipating a major switch to a bearish strategy (i.e. mostly selling short) once we hit a final top in the current medium-term cycle (or maybe the next one) - probably later this year. As I've said in earlier posts, we could see a new all-time high in the NASDAQ but not necessarily in the DOW and/or S&P 500. The correction from that top may be VERY big and last for some time (possibly into 2021 - 2022). Still on the sidelines of the broad stock market.
Gold made a new weekly high on Monday and silver made a new weekly high yesterday (still in the reversal zone), and both are dropping sharply today. This could be the start of a significant sub-cycle correction. We are still watching for a corrective low to buy as both metals still look quite bullish. Those ideal lows are now around $1690 for gold and $16 in silver. Let's wait and see if prices can get there. On the sidelines of both gold and silver for now.
Crude oil prices have been rallying strongly from what looks like a new medium-term cycle bottom on April 22. Crude could be making its first sub-cycle top now as prices made a new weekly high today at $36.78 (June contract chart). As with the broad stock market, however, today's new high is just outside our reversal zone which means prices could still push higher into the next strong reversal zone (there is one specifically for crude in the second week of June). Let's stay on the sidelines of this market for now.
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