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

Trading  Blog         Thursday (night),  December 11,  2014

12/11/2014

 
MARKETS  UPDATE  (10:45 pm EST)

This week the broad stock market is definitely falling strongly into the center of our timing window (Dec.12-15) for a likely market reversal.  This steep fall has triggered major bearish momentum signals in the charts of the DOW and S&P 500 which makes these two indices now mixed bullish and bearish (the NASDAQ remains mostly bullish).  The DOW has fallen over 300 points so far, but the cycle pattern and technical signals are suggesting the possibility of more downside with the DOW possibly reaching the 17,300 area and the S&P 500 perhaps dipping to the 1980 level. This could happen tomorrow or early next week. These may be good entry points to go long as the cycle structures still indicate that this correction should be brief in duration and will reverse back up soon.  Still on the sidelines.

On Tuesday gold and silver prices surged up with a major shift in several technical and cycle indicators that seem to be turning this market bullish.  Directional momentum is now mixed bullish and bearish for both gold and silver.   
It appears that both metals are now beginning new medium-term cycles and should be bullish for at least another month (probably longer) as long as gold remains above $1140 and silver stays above $14.50.  It's even possible that the new long-term cycles in these metals are now starting, and if so, prices could be bullish for some time and would likely move to new all time highs over the next several years. The long-term cycle bottoms cannot be confirmed just yet, however, so for now we will focus on medium and short-term trading.  Gold has been rising this week into a reversal zone and still has not exceeded strong resistance in the $1220 - $1250 area so some sort of correction seems imminent.  However, because the precious metals seem to be turning bullish, I am more inclined to buy the bottom of any correction now instead of selling short any top.  Both gold and silver are down today so a correction may already be starting.  On the other hand, if prices surge higher tomorrow and into next week, we may have to wait a little longer for a corrective low.  Still on the sidelines.

The U.S. Dollar Index this week aborted a technical breakout pattern it had been forming since early November and is now dropping steeply.  This seems to be at least part of the reason for the gold and silver rally.  While the bullish directional momentum in this index is still strong, there are signs of it weakening, and the current correction could become more severe.  A further breakdown in the dollar would support the bullish view of gold and silver discussed above.  A key area to watch in the dollar is 87- 87.5.  A clear break below that area would be bearish and could lead to a breakdown of the dollar.

Two major factors influencing crude oil prices recently are a glut in supply (made worse by OPEC's recent decision to not scale back production) and the possibility of the U.S. and EU manipulating prices down to weaken Russia's economy in a new cold war over the Ukraine crisis.  One clue that points to manipulation is the distortion of normal cycle patterns in oil price charts.  We have been seeing this for several months now as normal sub-cycle structures (i.e. pronounced rising and falling of prices at regular intervals) have been absent in this market as crude prices continue down in a relatively straight sloping line.  Because a major part of my trading strategy is based on cycle timing, this cycle distortion has been making the crude oil market difficult to trade as it obscures the normal lows and highs that would be ideal points to buy and sell.  In a "normal" market, the timing of the current cycle in crude would point to a brief rally now to be followed by lower lows (possibly down to the $50 area), but this market does not seem to want to rally at all. The end of this week through early next week is a likely reversal time for crude so we could still see a rally that might give us a good spot to sell short.  If crude doesn't start to rally by the end of next week, prices may just plunge straight into an early cycle bottom (which could be a good spot to buy).  We will have to wait and see if this market can muster a rally over the next several days.  Out of this market for now.







Comments are closed.

    RSS Feed

    Archives

    May 2025
    April 2025
    March 2025
    February 2025
    January 2025
    December 2024
    November 2024
    October 2024
    September 2024
    August 2024
    July 2024
    June 2024
    May 2024
    April 2024
    March 2024
    February 2024
    January 2024
    December 2023
    November 2023
    October 2023
    September 2023
    August 2023
    July 2023
    June 2023
    May 2023
    April 2023
    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.