MARKETS UPDATE (11:45 pm EDT)
Most financial markets were at a near standstill early in today's trading as they waited for the latest news on the Greek debt crisis. A key meeting of eurozone finance ministers broke up today without any agreements reached between Greece and its creditors. There could be another meeting on Saturday. Greek Prime Minister Alexis Tsipras expressed optimism before the meeting Wednesday night saying that. "... I am confident we will reach a compromise." Much to the annoyance of eurozone officials, however, Greece seems unwilling to compromise on its previously submitted anti-austerity proposals. It seems this standoff may push into the 11th hour with the approaching deadline for Greece's debt payment next Tuesday.
The broad stock market seemed unhappy as it digested this news, and the DOW started to drop in the afternoon, closing the day with a loss of 75 points. My suggested stop loss when we entered our long position in the broad stock market on June 10 was 17,700 in the DOW. The DOW touched this level on June 15 before starting a major rally. That appears to be a significant bottom and the start of a new cycle in this index. If so, then this week (according to cycle timing) is too early for a reversal and subsequent move below that 17,700 mark. If the DOW does break below that level, it means the old cycle is not over yet and the market could continue down for several more weeks, possibly bottoming in mid-July. The Greek debt crisis may be the factor that will resolve this current ambiguity in cycle labeling. If the crisis is resolved, stock markets could soar and would likely make new highs. A Greek default and exit from the eurozone, however, could sink the DOW below that 17,700 mark. Right now I am favoring the more bullish idea of a resolution to the Greek crisis and more rallying in the markets. I should note, however, that even in that scenario we could be looking at a market surge to new highs in July from which a major correction (10% or more) would follow. (We will want to cover any longs and go short if that happens). Maintaining my long position in the broad stock market for now.
Precious metal prices seemed unmoved by today's news on the Greek debt crisis. Like Greece and its creditors, gold and silver bulls and bears seem to be at a stalemate. Technical signals in the charts of both metals are currently mixed. Some of them support the possibility of a rally in prices now, but others are suggesting an imminent drop. We are now on the sidelines of both gold and silver.
The small rally in the U.S. Dollar Index early this week didn't get very far and now seems to be leveling off.
A resolution of the Greek debt crisis would likely weaken the dollar and push it back down towards support around 93. If that support is breached, the dollar's recent correction could become much more serious. A weak dollar would be bullish for gold and silver.
Crude oil prices fell a bit today along with the stock market. As I mentioned in my last blog on crude, the short-term technical and cycle picture in crude charts is unclear at the moment. As with the other markets, the outcome of Greece's standoff with its creditors over the next several days will probably determine the short-term directional trend for crude. Out of this market for now.
Most financial markets were at a near standstill early in today's trading as they waited for the latest news on the Greek debt crisis. A key meeting of eurozone finance ministers broke up today without any agreements reached between Greece and its creditors. There could be another meeting on Saturday. Greek Prime Minister Alexis Tsipras expressed optimism before the meeting Wednesday night saying that. "... I am confident we will reach a compromise." Much to the annoyance of eurozone officials, however, Greece seems unwilling to compromise on its previously submitted anti-austerity proposals. It seems this standoff may push into the 11th hour with the approaching deadline for Greece's debt payment next Tuesday.
The broad stock market seemed unhappy as it digested this news, and the DOW started to drop in the afternoon, closing the day with a loss of 75 points. My suggested stop loss when we entered our long position in the broad stock market on June 10 was 17,700 in the DOW. The DOW touched this level on June 15 before starting a major rally. That appears to be a significant bottom and the start of a new cycle in this index. If so, then this week (according to cycle timing) is too early for a reversal and subsequent move below that 17,700 mark. If the DOW does break below that level, it means the old cycle is not over yet and the market could continue down for several more weeks, possibly bottoming in mid-July. The Greek debt crisis may be the factor that will resolve this current ambiguity in cycle labeling. If the crisis is resolved, stock markets could soar and would likely make new highs. A Greek default and exit from the eurozone, however, could sink the DOW below that 17,700 mark. Right now I am favoring the more bullish idea of a resolution to the Greek crisis and more rallying in the markets. I should note, however, that even in that scenario we could be looking at a market surge to new highs in July from which a major correction (10% or more) would follow. (We will want to cover any longs and go short if that happens). Maintaining my long position in the broad stock market for now.
Precious metal prices seemed unmoved by today's news on the Greek debt crisis. Like Greece and its creditors, gold and silver bulls and bears seem to be at a stalemate. Technical signals in the charts of both metals are currently mixed. Some of them support the possibility of a rally in prices now, but others are suggesting an imminent drop. We are now on the sidelines of both gold and silver.
The small rally in the U.S. Dollar Index early this week didn't get very far and now seems to be leveling off.
A resolution of the Greek debt crisis would likely weaken the dollar and push it back down towards support around 93. If that support is breached, the dollar's recent correction could become much more serious. A weak dollar would be bullish for gold and silver.
Crude oil prices fell a bit today along with the stock market. As I mentioned in my last blog on crude, the short-term technical and cycle picture in crude charts is unclear at the moment. As with the other markets, the outcome of Greece's standoff with its creditors over the next several days will probably determine the short-term directional trend for crude. Out of this market for now.
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