MARKETS UPDATE (4:00 pm EDT)
We are now at the end of a strong reversal zone for the broad stock market (as well as precious metals) and equity markets are still looking very bullish. The NASDAQ 100 INDEX (E-MINI) Dec. contract chart finally broke above its previous all-time high (6,026) so now all of this market's indices (DOW, S&P 500, NASDAQ) are in record breaking territory. We will not see any intermarket bearish divergence this week. Equities are often bullish into holiday week-ends, and we have one this week-end (Columbus Day) in the U.S. For this reason, I'm going to extend the current reversal zone into next Tuesday. If we get a bearish divergence signal then (i.e. one or two, but not all three indices making new weekly highs) we may see a reversal in these markets and the start of some sort of correction. Still on the sidelines of the broad stock market.
Gold and silver both made new lows this week on Monday (gold at $1,268 and silver at $16.54) at the dead center of this current reversal zone, but prices have not really rallied much from there, and they are back down close to those lows today. Let's see if we can get a bullish divergence signal early next week with gold but not silver making a new weekly low. If silver moves lower next week, we may have to wait a few more weeks for a bottom to buy. Despite the short-term bearishness we are seeing now in this market, the medium and longer-term picture for gold and silver still looks quite positive and bullish. On the sidelines of gold and silver and waiting to buy.
As always, the U.S. Dollar Index will likely influence the direction of the precious metals. The dollar has been rallying since Sept. 8 and today nearly touched 94. Short-term technical signals are suggesting that the rally could continue a bit longer, but medium and longer-term charts still show the dollar to be in trouble. The current reversal zone for currencies ends next Wednesday. We could see the dollar form a top between now and then. If we do, that might correspond to a bottom in the precious metals.
We are now at the end of a strong reversal zone for the broad stock market (as well as precious metals) and equity markets are still looking very bullish. The NASDAQ 100 INDEX (E-MINI) Dec. contract chart finally broke above its previous all-time high (6,026) so now all of this market's indices (DOW, S&P 500, NASDAQ) are in record breaking territory. We will not see any intermarket bearish divergence this week. Equities are often bullish into holiday week-ends, and we have one this week-end (Columbus Day) in the U.S. For this reason, I'm going to extend the current reversal zone into next Tuesday. If we get a bearish divergence signal then (i.e. one or two, but not all three indices making new weekly highs) we may see a reversal in these markets and the start of some sort of correction. Still on the sidelines of the broad stock market.
Gold and silver both made new lows this week on Monday (gold at $1,268 and silver at $16.54) at the dead center of this current reversal zone, but prices have not really rallied much from there, and they are back down close to those lows today. Let's see if we can get a bullish divergence signal early next week with gold but not silver making a new weekly low. If silver moves lower next week, we may have to wait a few more weeks for a bottom to buy. Despite the short-term bearishness we are seeing now in this market, the medium and longer-term picture for gold and silver still looks quite positive and bullish. On the sidelines of gold and silver and waiting to buy.
As always, the U.S. Dollar Index will likely influence the direction of the precious metals. The dollar has been rallying since Sept. 8 and today nearly touched 94. Short-term technical signals are suggesting that the rally could continue a bit longer, but medium and longer-term charts still show the dollar to be in trouble. The current reversal zone for currencies ends next Wednesday. We could see the dollar form a top between now and then. If we do, that might correspond to a bottom in the precious metals.
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