MARKETS UPDATE (6:00 pm EDST)
The month of September is presenting us with a lot of reversal zones. We are nearing the end of the first one
(Sept. 2 - 11) and entering an overlapping second one (Sept. 8 - 17 ; this one is especially relevant to crude oil), and there is a third one coming up Sept. 23 - Oct. 2. What this means is that we could see all our markets making sharp reversals (up or down) in these time zones. Less common, but also possible, are breakouts or breakdowns in these same time periods.
Yesterday it looked like we were getting our anticipated bounce in the broad stock market from support at the 45-day moving averages in our broad stock market indices (DOW, S&P 500, NASDAQ), but today the market is back down and testing that support again. We will be in a reversal zone through next Thursday so this market could still find a bottom over the next five trading days. If the 45-day m.a. is broken, the DOW and S&P 500 could find support at the target levels mentioned in Tuesday's blog:
"If the DOW and S&P 500 are newer cycles (as we suspect), then we should get a sub-cycle bottom this week or next. That might be near the 45-day m.a. (now 27,300 in the DOW and 3,326 in the S&P 500, with both rising) or it could be in a wider target range between 26,500 - 27,500 in the DOW and 3,000 -3,300 in the S&P 500."
As I mentioned on Tuesday, the NASDAQ's medium-term cycle has most likely peaked and is now in the process of correcting down to its final cycle bottom. We missed the peak (12,074 on Sept. 2) to sell short, but as I stated on Tuesday, any rebound in our current reversal zone could give us a second chance to go short, especially if that bounce brings us back up to 11,500 or above. Still on the sidelines of the broad stock market.
Gold and silver prices rallied a bit yesterday and early this morning, but the rally has been weak, and both metals are closing down today. This market seems indecisive at the moment and has the potential for a strong move in either direction. We will stay on the sidelines of both gold and silver for now.
The U.S. Dollar Index has been rising this week, and that has most likely been keeping the precious metal prices from rallying strongly. The dollar is now encountering some resistance at its 45-day moving average, but it closed with bullish signals today. If the greenback can break through that moving average, the precious metals could take a hit and move lower.
The current medium-term cycle in crude oil is coming to an end as prices approach a final cycle bottom that is due this week or next. Prices seem to be finding support just above $36 (Oct. contract chart), but there's still time for them to go lower, especially if the broad stock market continues down. We are still interested in buying at the bottom of this cycle (and the start of a new one). A break above $40 now would suggest the bottom is in and may be a good signal to buy. For now, we are staying on the sidelines of crude.
The month of September is presenting us with a lot of reversal zones. We are nearing the end of the first one
(Sept. 2 - 11) and entering an overlapping second one (Sept. 8 - 17 ; this one is especially relevant to crude oil), and there is a third one coming up Sept. 23 - Oct. 2. What this means is that we could see all our markets making sharp reversals (up or down) in these time zones. Less common, but also possible, are breakouts or breakdowns in these same time periods.
Yesterday it looked like we were getting our anticipated bounce in the broad stock market from support at the 45-day moving averages in our broad stock market indices (DOW, S&P 500, NASDAQ), but today the market is back down and testing that support again. We will be in a reversal zone through next Thursday so this market could still find a bottom over the next five trading days. If the 45-day m.a. is broken, the DOW and S&P 500 could find support at the target levels mentioned in Tuesday's blog:
"If the DOW and S&P 500 are newer cycles (as we suspect), then we should get a sub-cycle bottom this week or next. That might be near the 45-day m.a. (now 27,300 in the DOW and 3,326 in the S&P 500, with both rising) or it could be in a wider target range between 26,500 - 27,500 in the DOW and 3,000 -3,300 in the S&P 500."
As I mentioned on Tuesday, the NASDAQ's medium-term cycle has most likely peaked and is now in the process of correcting down to its final cycle bottom. We missed the peak (12,074 on Sept. 2) to sell short, but as I stated on Tuesday, any rebound in our current reversal zone could give us a second chance to go short, especially if that bounce brings us back up to 11,500 or above. Still on the sidelines of the broad stock market.
Gold and silver prices rallied a bit yesterday and early this morning, but the rally has been weak, and both metals are closing down today. This market seems indecisive at the moment and has the potential for a strong move in either direction. We will stay on the sidelines of both gold and silver for now.
The U.S. Dollar Index has been rising this week, and that has most likely been keeping the precious metal prices from rallying strongly. The dollar is now encountering some resistance at its 45-day moving average, but it closed with bullish signals today. If the greenback can break through that moving average, the precious metals could take a hit and move lower.
The current medium-term cycle in crude oil is coming to an end as prices approach a final cycle bottom that is due this week or next. Prices seem to be finding support just above $36 (Oct. contract chart), but there's still time for them to go lower, especially if the broad stock market continues down. We are still interested in buying at the bottom of this cycle (and the start of a new one). A break above $40 now would suggest the bottom is in and may be a good signal to buy. For now, we are staying on the sidelines of crude.
RSS Feed