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

Trading Blog         Thursday,  May 5,  2016

5/5/2016

 
MARKETS  UPDATE  (6:00 pm EDT)

The broad stock market has been falling this week, and we are entering the center of another reversal zone early next week so we should be watching for a bottom here. Equities were mostly flat today as investors were likely indecisive ahead of tomorrow's jobs report. We will wait and see how the market responds to the employment data. It may be a trigger for a reversal, but if not we could see equities move lower into early next week before turning back up. I would consider taking profits in our short position now, but this correction has been modest so far and technically has the potential to move considerably lower. On the other hand, directional momentum remains strongly bullish for the broad stock market, and we can assume the Fed wants to keep equities buoyant into the upcoming presidential election so perhaps we shouldn't expect a normal correction. Holding my short position in the broad stock market but looking to cover this position soon.

Gold and silver
prices are also falling into next week's reversal zone but, as with the broad stock market, the correction hasn't been very deep. The COT (Commitment of Traders) charts are still very bearish for these precious metals which is suggesting a deeper correction. On the other hand, cycle analysis suggests that both gold and silver are "breaking out", and directional momentum in both metals is now strongly bullish. These mixed signals are keeping us on the trading sidelines for now. Let's wait and see if prices can go lower into next week before considering a long position. On the sidelines of both gold and silver for now.

In Monday's blog on the U.S. dollar I wrote:

"What happens to gold and silver now will depend on the U.S. dollar. Today the U.S. Dollar Index closed below important support at 93 which means that it is in danger of melting down. There is some support down to 92.5, and it is resting at that level now. Market volatility is high right now so this breakdown could also be a "fake-out". We have to see the dollar reverse back up soon to avert the danger of a more serious collapse. We will be watching this situation carefully."

On Tuesday, the U.S. Dollar Index plunged briefly to 91.88 but then snapped back up and closed above 92. It rallied today and closed above 93 so the breakdown could indeed be a "fake-out". If so, the dollar may be getting ready to start another strong rally, and this would likely push precious metal prices lower. 

Crude oil prices are down this week and appear to be sinking into next week's reversal zone (which is especially relevant to crude); however, prices surged briefly today and came close to last week's high ($46.78 in June contract chart) before falling again and closing below $45. This makes me think that crude could still make a new high in the first half of next week closer to our target near $50 before making a significant correction. That would be an ideal spot to sell short if it happens next week. If prices continue to fall, we will instead look for a bottom to buy as the longer-term crude cycle seem to be turning bullish. Out of crude oil for now.



​

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.