MARKETS UPDATE (11:15 pm EDT)
We are still looking for either a high or low in the broad stock market for the end of this week into early next week. Right now it is unclear which it will be. Tuesday's plunge in the DOW was followed by a rally yesterday, and today the markets were down again. Directional momentum remains strongly bullish in the DOW, S&P 500, and NASDAQ, and if new highs are to be made we may not see them until next week. Alternatively, a low in the 17,600 - 17,800 over the next several trading days would not necessarily break the bullish momentum and could give us a good spot to go long. Still on the sidelines of this market.
Gold prices seem to be holding above $1180 and silver prices above $16.50. The current cycle structure and timing in the charts of both these metals suggests the possibility of a strong short-term rally into next week, but there have been no buy signals so far. If a rally doesn't start soon, we could instead see prices fall steeply to new lows. On Tuesday the gold and silver mining company stock index XAU turned 100% bearish. This is not a good sign for the precious metals as the mining company stocks often lead the prices of the metals themselves. On the sidelines here.
The U.S.Dollar Index is down a bit today after achieving a high of 97.38 on Tuesday. There is considerable resistance for the dollar around 98. Whether or not this resistance can be broken may depend on how the Greek debt crisis is resolved over the next week or two. Some political and financial analysts are optimistic that Greece will work out a deal with its creditors, but others say this optimism is unfounded and that Greece will likely default and have to exit the eurozone. If the latter scenario unfolds, the dollar may surge and push the prices of gold and silver lower. We will have to wait to see how this unfolds over the next two weeks.
Crude oil is still looking bearish short-term, and we are staying the course with our short position for now. I am still expecting to see prices dip into the $52 - $55 range over the next week or two. Holding my short position here.
We are still looking for either a high or low in the broad stock market for the end of this week into early next week. Right now it is unclear which it will be. Tuesday's plunge in the DOW was followed by a rally yesterday, and today the markets were down again. Directional momentum remains strongly bullish in the DOW, S&P 500, and NASDAQ, and if new highs are to be made we may not see them until next week. Alternatively, a low in the 17,600 - 17,800 over the next several trading days would not necessarily break the bullish momentum and could give us a good spot to go long. Still on the sidelines of this market.
Gold prices seem to be holding above $1180 and silver prices above $16.50. The current cycle structure and timing in the charts of both these metals suggests the possibility of a strong short-term rally into next week, but there have been no buy signals so far. If a rally doesn't start soon, we could instead see prices fall steeply to new lows. On Tuesday the gold and silver mining company stock index XAU turned 100% bearish. This is not a good sign for the precious metals as the mining company stocks often lead the prices of the metals themselves. On the sidelines here.
The U.S.Dollar Index is down a bit today after achieving a high of 97.38 on Tuesday. There is considerable resistance for the dollar around 98. Whether or not this resistance can be broken may depend on how the Greek debt crisis is resolved over the next week or two. Some political and financial analysts are optimistic that Greece will work out a deal with its creditors, but others say this optimism is unfounded and that Greece will likely default and have to exit the eurozone. If the latter scenario unfolds, the dollar may surge and push the prices of gold and silver lower. We will have to wait to see how this unfolds over the next two weeks.
Crude oil is still looking bearish short-term, and we are staying the course with our short position for now. I am still expecting to see prices dip into the $52 - $55 range over the next week or two. Holding my short position here.
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