Today the DOW and S&P 500 are finally breaking below their 15-day moving averages. (The NASDAQ did this last week and it is is now approaching its 45-day moving average.) All three indices are now between their 15-day and 45-day moving averages which is an ideal spot for the bottom of a sub-cycle correction that is now due for all three. We also have some bullish divergence as the NASDAQ is making new monthly lows while the S&P 500 and DOW are not. We are inside a strong potential "pivot point" in the broad stock market today and tomorrow, so it looks like a good time to consider going long for another rally into May. That rally could test the highs of the previous medium-term cycles in the DOW and S&P 500 (that would be 34,712 in the DOW and 4,195 in the S&P 500). If this market stays bullish, there's still the possibility of at least the DOW testing its all-time high of 36,953 from Jan. 2022. Let's plan on going long tomorrow if the DOW and S&P 500 can edge a bit lower for a second day under their 15-day moving averages. A close back above those averages would signal that the corrective low is in. We will remain on the sidelines for today.
Crude oil is making a new low today at $76.50 (May contract chart). Prices have been sharply down for 9 days from the $83.38 high of April 12. Today's low could easily be a sub-cycle bottom, but if prices start pushing below the 45-day moving average (currently flat at $76.25), this market could turn bearish. If prices rally instead and close back above the 15-day moving average (currently $80.21 and falling slowly), it would mean the sub-cycle low is in, and that would be a good signal to go long for another strong rally. Let's wait for that signal as we remain on the sidelines of crude for now.
Today silver prices dipped to a new weekly low ($24.53) while gold did not, and both are closing in the upper part of their day's range. This is a bullish divergence signal and is supporting our idea that a sub-cycle low and a reversal up is imminent in both metals. We went long in gold last week (its sub-cycle low was due) but held off on buying silver as this week seemed a more likely time for silver's low. Today's low may be it, but a strong potential "pivot point" for silver is coming up Thursday and Friday. I would be more comfortable seeing a low then (or even tomorrow) before going long. Let's stay on the sidelines of silver and see if it can go lower over the next day or two. We are still holding our long position in gold.