MARKETS UPDATE (10:30 pm EST)
The broad stock market has been rising steeply this week. The NASDAQ broke above its Aug./Sept. high, but the DOW and S&P 500 failed to exceed their Aug./Sept. highs, so we have a bearish divergence signal for now. We are moving into the center of a mild reversal zone (Nov. 14 - 23) so we are on the lookout for a top followed by a downward correction. As I discussed in my previous blog, it is very early in our medium-term cycles for the DOW, S&P 500, and NASDAQ, and equity markets are now looking very bullish. We therefore intend to buy any significant corrective low. We remain on the sidelines for now.
Gold and silver both rallied strongly today, and gold closed above its 15-day moving average, a bullish sign. This is good news for our long gold position which we entered on Nov. 9 as it now gives us a profit (it was slightly in the red Friday and Monday). To confirm a bullish trend in the current medium-term cycle, gold needs to start closing above its Oct. high of $2009. Silver has already cleared its Oct. high and looks very bullish. We note, however, that this sharp rally in silver is happening inside our current general reversal zone, so a sharp correction down to a sub-cycle low may be imminent. If that happens, we may be looking to buy. We will probably ride out any corrective dips in gold, as long as they don't go TOO low (i.e. say, below $1920). We expect silver to challenge and exceed its previous medium-term cycle top ($25.26) over the next several weeks and gold to challenge and exceed the $2050 line on its way to a potential new all-time high. Let's hold our long position in gold and remain on the sidelines of silver for now.
Today crude oil prices plummeted to a new low around $72 (Dec. contract chart) reinforcing our analysis showing the current medium-term cycle turning bearish. It's still not clear if this medium-term cycle started with the low of Aug. 24 ($77.03) or the low of Oct. 6 ($80.20). Either way, its bearish, and prices will be headed lower until the final cycle bottom is reached. In the meantime, we will stay on the sidelines of crude.
The broad stock market has been rising steeply this week. The NASDAQ broke above its Aug./Sept. high, but the DOW and S&P 500 failed to exceed their Aug./Sept. highs, so we have a bearish divergence signal for now. We are moving into the center of a mild reversal zone (Nov. 14 - 23) so we are on the lookout for a top followed by a downward correction. As I discussed in my previous blog, it is very early in our medium-term cycles for the DOW, S&P 500, and NASDAQ, and equity markets are now looking very bullish. We therefore intend to buy any significant corrective low. We remain on the sidelines for now.
Gold and silver both rallied strongly today, and gold closed above its 15-day moving average, a bullish sign. This is good news for our long gold position which we entered on Nov. 9 as it now gives us a profit (it was slightly in the red Friday and Monday). To confirm a bullish trend in the current medium-term cycle, gold needs to start closing above its Oct. high of $2009. Silver has already cleared its Oct. high and looks very bullish. We note, however, that this sharp rally in silver is happening inside our current general reversal zone, so a sharp correction down to a sub-cycle low may be imminent. If that happens, we may be looking to buy. We will probably ride out any corrective dips in gold, as long as they don't go TOO low (i.e. say, below $1920). We expect silver to challenge and exceed its previous medium-term cycle top ($25.26) over the next several weeks and gold to challenge and exceed the $2050 line on its way to a potential new all-time high. Let's hold our long position in gold and remain on the sidelines of silver for now.
Today crude oil prices plummeted to a new low around $72 (Dec. contract chart) reinforcing our analysis showing the current medium-term cycle turning bearish. It's still not clear if this medium-term cycle started with the low of Aug. 24 ($77.03) or the low of Oct. 6 ($80.20). Either way, its bearish, and prices will be headed lower until the final cycle bottom is reached. In the meantime, we will stay on the sidelines of crude.
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