UPDATES ON THE BROAD STOCK MARKET, GOLD, and SILVER (10:00 pm EDT)
The DOW seems to be making a significant downturn this week, but the S&P 500 and NASDAQ do not seem as enthusiastic in their dips. It is fairly late in the medium-term cycles of all three indices, so we are waiting for their final corrective bottoms as a place to buy the start of a new cycle (as long as the bottoms aren't too low). Yesterday's and today's lows are happening in the center of our general reversal zone (Oct. 22 - 30), so prices could snap back up any day now. It's a bit early for the final medium-term cycle bottom, and only the DOW seems to be making a significant sub-cycle correction right now. We will remain on the sidelines of the broad stock market for now.
Gold's current longer-term cycle continues to be elusive. If we are near the end of a 50-week cycle (that began with an $1812 bottom in Oct. 2023), a steep drop in prices is imminent with a final bottom due by the end of November. But as I've mentioned in previous blogs, the Oct. 10 low of $2606 may have been the 50-week low already. The fact that gold prices continue to push higher above $2700 (they made a new all-time high yesterday at $2758) suggests a new 50-week cycle has started. But the shallow correction to $2606 on Oct. 10 was well above the normal target range for a 50-week cycle, and this suggests the older cycle may still be in place and ready to plunge any day now. We'll just have to wait a few more weeks to see if a deeper corrective drop is coming (which would be a good place to buy if it happens). If it doesn't happen by the end of November, we might have to accept that the 50-week bottom was on Oct. 10 at $2606.
Gold's medium-term cycle is also unclear at the moment. It may have started way back on June 7 at $2287. If this is the case, a normal final cycle bottom is due this week or next. But if a 50-week cycle bottom is still ahead, the medium-term cycle could expand and see a final bottom near the end of November. A third possibility is that a new medium-term cycle began with the Oct. 10 low at $2606. In this case, the cycle would be very young and bullish and could now rally above $2800. Our original trading strategy for gold was to buy the deep bottom of a 50-week cycle. We may still get to do that, but if the 50-week bottom was Oct.10, we missed it and will have to wait for the next significant sub-cycle corrective low to buy as we expect new all-time highs into 2025. For now, we remain on the sidelines of gold until we have more clarity on these cycles.
Silver's current cycles are a bit more clear than gold's cycles. A strong rally this week has taken this metal to new 10 year highs near $35. This means it is most likely a new 4.3-year longer-term cycle began one year ago in Oct. 2023. That means silver is bullish, and we are NOT going to see a final 4.3 year steep corrective drop into the end of this year as we had been anticipating. Nevertheless, it is now late in the current MEDIUM-TERM cycle in silver, and the final bottom is due 2 - 8 weeks from now. Silver made an isolated high on Tuesday inside a general reversal zone and a "pivot-point" for silver. Prices are falling from there, but there is still plenty of time for prices to edge up higher into next week's reversal zone specific to precious metals (Oct. 24 - Nov. 4) before taking any serious correction. Our trading strategy now will be to buy any significant corrective lows - ideally the final low of the current medium-term cycle. We will stay on the sidelines of silver for now.
The DOW seems to be making a significant downturn this week, but the S&P 500 and NASDAQ do not seem as enthusiastic in their dips. It is fairly late in the medium-term cycles of all three indices, so we are waiting for their final corrective bottoms as a place to buy the start of a new cycle (as long as the bottoms aren't too low). Yesterday's and today's lows are happening in the center of our general reversal zone (Oct. 22 - 30), so prices could snap back up any day now. It's a bit early for the final medium-term cycle bottom, and only the DOW seems to be making a significant sub-cycle correction right now. We will remain on the sidelines of the broad stock market for now.
Gold's current longer-term cycle continues to be elusive. If we are near the end of a 50-week cycle (that began with an $1812 bottom in Oct. 2023), a steep drop in prices is imminent with a final bottom due by the end of November. But as I've mentioned in previous blogs, the Oct. 10 low of $2606 may have been the 50-week low already. The fact that gold prices continue to push higher above $2700 (they made a new all-time high yesterday at $2758) suggests a new 50-week cycle has started. But the shallow correction to $2606 on Oct. 10 was well above the normal target range for a 50-week cycle, and this suggests the older cycle may still be in place and ready to plunge any day now. We'll just have to wait a few more weeks to see if a deeper corrective drop is coming (which would be a good place to buy if it happens). If it doesn't happen by the end of November, we might have to accept that the 50-week bottom was on Oct. 10 at $2606.
Gold's medium-term cycle is also unclear at the moment. It may have started way back on June 7 at $2287. If this is the case, a normal final cycle bottom is due this week or next. But if a 50-week cycle bottom is still ahead, the medium-term cycle could expand and see a final bottom near the end of November. A third possibility is that a new medium-term cycle began with the Oct. 10 low at $2606. In this case, the cycle would be very young and bullish and could now rally above $2800. Our original trading strategy for gold was to buy the deep bottom of a 50-week cycle. We may still get to do that, but if the 50-week bottom was Oct.10, we missed it and will have to wait for the next significant sub-cycle corrective low to buy as we expect new all-time highs into 2025. For now, we remain on the sidelines of gold until we have more clarity on these cycles.
Silver's current cycles are a bit more clear than gold's cycles. A strong rally this week has taken this metal to new 10 year highs near $35. This means it is most likely a new 4.3-year longer-term cycle began one year ago in Oct. 2023. That means silver is bullish, and we are NOT going to see a final 4.3 year steep corrective drop into the end of this year as we had been anticipating. Nevertheless, it is now late in the current MEDIUM-TERM cycle in silver, and the final bottom is due 2 - 8 weeks from now. Silver made an isolated high on Tuesday inside a general reversal zone and a "pivot-point" for silver. Prices are falling from there, but there is still plenty of time for prices to edge up higher into next week's reversal zone specific to precious metals (Oct. 24 - Nov. 4) before taking any serious correction. Our trading strategy now will be to buy any significant corrective lows - ideally the final low of the current medium-term cycle. We will stay on the sidelines of silver for now.
RSS Feed