MARKETS UPDATE (8:30 pm EDT)
The broad stock market continues to "waffle" about in its directional trend, and this is making it difficult for us to definitively label the current medium-term cycles in the DOW, S&P 500 and NASDAQ. My best guess at the moment is that all three indices have expanded and they are currently in the process of falling to their final medium-term cycle bottoms. If this is the case, prices should be headed lower to make a final bottom - either tomorrow (the last day of our relatively weak reversal zone) or more likely into our next strong reversal zone coming up April 22 - May 3.
We also need to consider the possibility that the DOW and NASDAQ's medium-term cycles already bottomed with last Thursday's lows. Those lows came two weeks after their isolated highs on March 21, and a 2-week fall is our minimum requirement for a final cycle low. The S&P 500's low from last Thursday was only a week after its March 28 high. That might also be a final bottom, but if it pushes lower this week, it too would satisfy a minimum 2-week drop. If the final bottoms are in, then these indices should be very bullish and ready to rally strongly. Let's wait to see if that happens.
Our trading strategy now is to look to buy the start of any new medium-term cycle. We may have to wait until the end of the month for that, but if new cycles already started from last Thursday's lows, we may see a strong rally into the new strong reversal zone coming up at the end of the month instead of a fall. In that situation, we would watch for a high inside the reversal zone and then a significant correction down to a good buy spot. We anticipate more bullish rallying into the summer. We remain on the sidelines of this market for now.
Silver and gold prices continue to push higher with gold touching $2364 and silver reaching $28.29 today before they both backed down a bit. Both metals are still inside our general reversal zone until tomorrow, but they are moving away from several "pivot points" from last week and yesterday. These prices have been rising very steeply for almost two weeks and are overdue for a correction. If it doesn't happen now, we could see prices edge higher into the end of this week and early next week where we have more potentially strong "pivot points" for both metals. Our cycle analysis is also suggesting an imminent sharp correction is possible in both gold and silver.
Any significant correction in gold should at least test the 15-day moving average (now at $2256 and rising) but could also get as low as the 45-day moving average (now at $2141 and rising). Silver could also drop into a wide price range from $23 - $25 to satisfy a significant sub-cycle correction. Let's watch for a sharp correction into these ranges where we will consider going long again in both metals. For now, we remain on the sidelines.
Crude oil prices rallied a bit today. Last Friday's high at $87.63 (May contract price) was probably the final high in crude's current medium-term cycle (unless prices edge higher this week). That high is now due (overdue). We like to see a 2-5 week corrective fall from the final high to the final cycle bottom. If prices continue to fall, it will be a 3-week correction into our next reversal zone for crude (April 22 - May 3). That would be the ideal spot for a bottom. Let's watch for it. As long as prices stay above $70, we will be looking to buy at that bottom as crude continues to look very bullish into the end of this year. We are on the sidelines of crude for now.
The broad stock market continues to "waffle" about in its directional trend, and this is making it difficult for us to definitively label the current medium-term cycles in the DOW, S&P 500 and NASDAQ. My best guess at the moment is that all three indices have expanded and they are currently in the process of falling to their final medium-term cycle bottoms. If this is the case, prices should be headed lower to make a final bottom - either tomorrow (the last day of our relatively weak reversal zone) or more likely into our next strong reversal zone coming up April 22 - May 3.
We also need to consider the possibility that the DOW and NASDAQ's medium-term cycles already bottomed with last Thursday's lows. Those lows came two weeks after their isolated highs on March 21, and a 2-week fall is our minimum requirement for a final cycle low. The S&P 500's low from last Thursday was only a week after its March 28 high. That might also be a final bottom, but if it pushes lower this week, it too would satisfy a minimum 2-week drop. If the final bottoms are in, then these indices should be very bullish and ready to rally strongly. Let's wait to see if that happens.
Our trading strategy now is to look to buy the start of any new medium-term cycle. We may have to wait until the end of the month for that, but if new cycles already started from last Thursday's lows, we may see a strong rally into the new strong reversal zone coming up at the end of the month instead of a fall. In that situation, we would watch for a high inside the reversal zone and then a significant correction down to a good buy spot. We anticipate more bullish rallying into the summer. We remain on the sidelines of this market for now.
Silver and gold prices continue to push higher with gold touching $2364 and silver reaching $28.29 today before they both backed down a bit. Both metals are still inside our general reversal zone until tomorrow, but they are moving away from several "pivot points" from last week and yesterday. These prices have been rising very steeply for almost two weeks and are overdue for a correction. If it doesn't happen now, we could see prices edge higher into the end of this week and early next week where we have more potentially strong "pivot points" for both metals. Our cycle analysis is also suggesting an imminent sharp correction is possible in both gold and silver.
Any significant correction in gold should at least test the 15-day moving average (now at $2256 and rising) but could also get as low as the 45-day moving average (now at $2141 and rising). Silver could also drop into a wide price range from $23 - $25 to satisfy a significant sub-cycle correction. Let's watch for a sharp correction into these ranges where we will consider going long again in both metals. For now, we remain on the sidelines.
Crude oil prices rallied a bit today. Last Friday's high at $87.63 (May contract price) was probably the final high in crude's current medium-term cycle (unless prices edge higher this week). That high is now due (overdue). We like to see a 2-5 week corrective fall from the final high to the final cycle bottom. If prices continue to fall, it will be a 3-week correction into our next reversal zone for crude (April 22 - May 3). That would be the ideal spot for a bottom. Let's watch for it. As long as prices stay above $70, we will be looking to buy at that bottom as crude continues to look very bullish into the end of this year. We are on the sidelines of crude for now.
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