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

Trading Blog          Thursday,  May 25,  2017

5/25/2017

 
MARKETS  UPDATE  (5:15 pm EDT)

Today the DOW finally made a new weekly and monthly high which negates its intermarket bearish divergence over the last week or two against the S&P 500 and NASDAQ (which had been consistently making new highs). The DOW still needs to exceed its all-time high from March 1 (21,169) to be fully bullish, but it is close to doing that. Directional momentum for all three indices is now nearly 100% (the DOW and S&P 500 were mixed bearish and bullish briefly last week). All of this bodes well for our preferred scenario of more rallying of the broad stock market into at least the first week of June. We are now out of the recent reversal zone for equities so we don't expect any major reversals until the next one (centered around June 2).  Holding my long position in the broad stock market.

The precious metals market is a bit tricky to call right now, and several analysts that I follow seem to disagree on whether this market is turning bullish or bearish. From a cycles perspective, it appears that both gold and silver started new medium-term cycles on May 9. If so, then both metals should be at least short-term bullish. The other possibility is that either gold or silver (or both) are still completing older (overdue) cycles, in which case we could see prices drop sharply below those lows from May 9, probably by the first week of June. (In previous blogs I had mentioned the possibility of this happening with one metal making a new low and the other staying above its May 9th low for a case of intermarket bullish divergence and a good spot to buy). There is a reversal zone centered around June 2 for all markets and a specific one for the precious metals centered around June 7. If prices now fall into one of those dates, it will be a good buy spot (especially if we get a bullish divergence signal as stated above). If prices instead rise into early June (I think this is more likely) then we would likely unload and take profits in our long position in gold and maybe even sell short depending on how high prices get (we would like to see gold break and close above $1308 to remain bullish). We are still holding a long position in gold. Let's raise our stop loss for this trade on a close below $1,240 (unless that happens near June 2 or 7). We are out of silver but will look to buy again on any correction that stays above $16.07. 

As usual, the movement of the U.S. dollar will likely influence the direction of the precious metals. The U.S. Dollar Index is finding support at 97, but can it start a new rally from there?  Maybe, but directional momentum in this chart is still nearly 100% bearish. Also, there is a major reversal zone for currencies coming up in the first week of June. If the dollar is going to make a major bottom and reverse, it is more likely to happen then, not now. If the dollar does rally into that reversal date, it may be setting up for another major fall and a deeper correction. Because the dollar usually moves in a direction opposite the price of gold and silver, we will watch this index carefully over the next week or two.

Crude oil prices reached $51.88 (July contract chart) yesterday (the last day of the recent reversal zone) then plunged dramatically today. This looks like the start of a sub-cycle correction, and if so it could bottom as early as next week or possibly the following week. As long as prices stay above $44.13, we will be looking to buy the bottom of this correction. On the sidelines of crude oil for now.



​

Comments are closed.

    RSS Feed

    Archives

    March 2023
    February 2023
    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.