MARKETS UPDATE (10:30 pm EDST)
The broad stock market continues to be stubbornly bullish and seemingly reluctant to take any significant corrective drop, despite the fact that our medium-term cycle labeling for all three indices (DOW, S&P 500, NASDAQ) indicates that they are all overdue for a final top and a subsequent sharp and significant correction down. We noted in a previous blog that the DOW may have already completed its medium-term cycle bottom with its March 5 low at 38,457. If that's true, then the DOW has started a new medium-term cycle and would be very bullish. But the S&P 500 and NASDAQ charts do not show a similar alternate labeling, so the prospect of a strong corrective drop is still looming over this market - at least for these latter two indices.
Today the S&P 500 made yet another new weekly (and all-time) high, and the DOW came very close to doing the same thing. The NASDAQ, however, remained significantly below last week's high, so we have yet another bearish divergence signal between these indices. We are also inside a potential "pivot point" for this market (March 27 - 29), so yes, we could get a strong turn-down now. The next strong general reversal zone is coming up April 22 - May 3. That would be the ideal spot for a final corrective bottom, but because it is so late in the cycle, we could even see a sharp correction start now and bottom inside a weak reversal zone coming up next week (April 1 - 10). Either way, we are still watching for a medium-term cycle bottom to buy as this market could continue to rally strongly into the summer (although beyond that we are expecting a very significant longer-term correction down).. We are currently on the sidelines of the broad stock market.
Gold and silver prices rallied strongly today. Gold is looking very bullish as it has now broken clearly above the "triple top" formation at $2060 - $2070 on Aug. 2020, March 2022, and May 2023 and is making new all-time highs (today reaching $2231). Gold has also been rallying strongly from the start of a new medium-term cycle on Feb. 14 (at $1986). This new cycle's first sub-cycle dip may have happened with last Monday's low at $2146, or a deeper sub-cycle correction may be imminent. Either way, we are going to continue holding our long position in gold and try to ride out any corrections, as this cycle is still relatively young and gold seems poised to rally higher. An estimated target for the top of the current medium-term cycle could be around $2300 - $2380.
Silver also started a new medium-term cycle on Feb. 14, and it may have made its first sub-cycle dip with yesterday's low at $24.34, but it could still go lower. Friday through next Monday is a potentially strong "pivot point" for both gold and silver, so a new low in that time window would not be unexpected. As with gold, however, we are going to try and ride out any corrections in silver right now as this new medium-term cycle's trend looks bullish. To confirm that we will have to see prices start closing above last week's high at $25.74. We went long in silver on March 1 around $23, so we already have a profit buffer on our trade and can afford to ride out any further dips that stay above $23. A clear break above $25.74 could get us on track to a target range of $27 - $35 by the end of this year.
We continue to hold our long position in silver.
Crude oil prices rallied strongly today and exceeded last week's high of $83.12 (May contract chart). Prices also closed above an upward sloping trend channel that has been in place since December last year, which is a bullish sign (as long as prices can hold above that channel - now around $82.40 and rising).
As I mentioned in Monday's blog on crude, the sub-cycle labeling of the current medium-term cycle is a little unclear. But we know the cycle is old and near completion, so a final top is imminent and will be followed by a final sharp correction down to the cycle bottom. That bottom is due anytime now by mid-May. Because the final corrective drop should take 2 - 5 weeks, the final top cannot be far away. We may even see it this week as today and Friday defines a potentially strong "pivot point" for this market (and others). Also, next week we enter another (somewhat weak) general reversal zone (April 1 - 10). After that, we don't have any reversal zones until the last week of April (April 22 - May 3, a very strong reversal). Based on all this, a likely scenario could see a final top in crude this week or next followed by a sharp correction down into a final bottom in late April/early May. Crude still looks very bullish into the end of this year, so we will be looking to buy this current medium-term cycle bottom, wherever it ends up landing. We remain on the sidelines of crude for now.
The broad stock market continues to be stubbornly bullish and seemingly reluctant to take any significant corrective drop, despite the fact that our medium-term cycle labeling for all three indices (DOW, S&P 500, NASDAQ) indicates that they are all overdue for a final top and a subsequent sharp and significant correction down. We noted in a previous blog that the DOW may have already completed its medium-term cycle bottom with its March 5 low at 38,457. If that's true, then the DOW has started a new medium-term cycle and would be very bullish. But the S&P 500 and NASDAQ charts do not show a similar alternate labeling, so the prospect of a strong corrective drop is still looming over this market - at least for these latter two indices.
Today the S&P 500 made yet another new weekly (and all-time) high, and the DOW came very close to doing the same thing. The NASDAQ, however, remained significantly below last week's high, so we have yet another bearish divergence signal between these indices. We are also inside a potential "pivot point" for this market (March 27 - 29), so yes, we could get a strong turn-down now. The next strong general reversal zone is coming up April 22 - May 3. That would be the ideal spot for a final corrective bottom, but because it is so late in the cycle, we could even see a sharp correction start now and bottom inside a weak reversal zone coming up next week (April 1 - 10). Either way, we are still watching for a medium-term cycle bottom to buy as this market could continue to rally strongly into the summer (although beyond that we are expecting a very significant longer-term correction down).. We are currently on the sidelines of the broad stock market.
Gold and silver prices rallied strongly today. Gold is looking very bullish as it has now broken clearly above the "triple top" formation at $2060 - $2070 on Aug. 2020, March 2022, and May 2023 and is making new all-time highs (today reaching $2231). Gold has also been rallying strongly from the start of a new medium-term cycle on Feb. 14 (at $1986). This new cycle's first sub-cycle dip may have happened with last Monday's low at $2146, or a deeper sub-cycle correction may be imminent. Either way, we are going to continue holding our long position in gold and try to ride out any corrections, as this cycle is still relatively young and gold seems poised to rally higher. An estimated target for the top of the current medium-term cycle could be around $2300 - $2380.
Silver also started a new medium-term cycle on Feb. 14, and it may have made its first sub-cycle dip with yesterday's low at $24.34, but it could still go lower. Friday through next Monday is a potentially strong "pivot point" for both gold and silver, so a new low in that time window would not be unexpected. As with gold, however, we are going to try and ride out any corrections in silver right now as this new medium-term cycle's trend looks bullish. To confirm that we will have to see prices start closing above last week's high at $25.74. We went long in silver on March 1 around $23, so we already have a profit buffer on our trade and can afford to ride out any further dips that stay above $23. A clear break above $25.74 could get us on track to a target range of $27 - $35 by the end of this year.
We continue to hold our long position in silver.
Crude oil prices rallied strongly today and exceeded last week's high of $83.12 (May contract chart). Prices also closed above an upward sloping trend channel that has been in place since December last year, which is a bullish sign (as long as prices can hold above that channel - now around $82.40 and rising).
As I mentioned in Monday's blog on crude, the sub-cycle labeling of the current medium-term cycle is a little unclear. But we know the cycle is old and near completion, so a final top is imminent and will be followed by a final sharp correction down to the cycle bottom. That bottom is due anytime now by mid-May. Because the final corrective drop should take 2 - 5 weeks, the final top cannot be far away. We may even see it this week as today and Friday defines a potentially strong "pivot point" for this market (and others). Also, next week we enter another (somewhat weak) general reversal zone (April 1 - 10). After that, we don't have any reversal zones until the last week of April (April 22 - May 3, a very strong reversal). Based on all this, a likely scenario could see a final top in crude this week or next followed by a sharp correction down into a final bottom in late April/early May. Crude still looks very bullish into the end of this year, so we will be looking to buy this current medium-term cycle bottom, wherever it ends up landing. We remain on the sidelines of crude for now.
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