MARKETS UPDATE (1:30 pm EDST)
We are leaving last week's reversal zone for the broad stock market today as both the DOW and S&P 500 make new weekly highs. At the time of this writing the NASDAQ is also close to breaking its high from last week so I don't think we will see a bearish divergence signal here. Unless these indices turn down sharply from today's highs, it looks like the lows of Aug. 2 were the turning points for the DOW and S&P 500 in last week's reversal zone (and probably July 30 for the NASDAQ), and we will now see more rallying into our next reversal zone coming up Aug. 20 - 28. We are still watching carefully for a major cycle top and a significant correction to follow. We may see that top and an opportunity to sell short in the next reversal zone. On the sidelines of this market for now.
Today is the last day of our reversal zone for precious metals. Yesterday gold made a new weekly low at $1203.90 while silver stayed above its low from last week (and also above its July 19 low of $15.18) so we still have a bullish divergence signal for this market. The U.S. Dollar Index is also in a reversal zone (it ends Thursday) and the dollar may be rolling over from yesterday's high of 95.36 (there is strong resistance at 95 - 95.5). If the dollar falls it will boost gold and silver prices. There is a good chance precious metals will rally now, but if gold makes new lows after today (and especially if accompanied by new lows in silver), then prices could fall into the next reversal zone for precious metals coming up Aug. 20 - 28 (same as for equities). Holding my long position in gold but ready to bail out if prices turn south. Still on the sidelines of silver.
We are also leaving our reversal zone for crude oil today, but another one is coming up fast (Aug. 15 - 23). Crude's sub-cycle patterns are a little confusing right now so I am just going to focus on this next reversal zone. If prices rally into it and challenge the recent July 10 high of $72.98 (Sept. contract chart), it will be an opportunity to sell short. If instead crude falls to a new low (and stays above $63), we may consider buying. The top of a longer-term three year cycle in crude is due (and may have even happened with the high of July 10) so we are more interested in selling short this market than going long (any buying would be for a short-term rally). On the sidelines of crude oil for now.
We are leaving last week's reversal zone for the broad stock market today as both the DOW and S&P 500 make new weekly highs. At the time of this writing the NASDAQ is also close to breaking its high from last week so I don't think we will see a bearish divergence signal here. Unless these indices turn down sharply from today's highs, it looks like the lows of Aug. 2 were the turning points for the DOW and S&P 500 in last week's reversal zone (and probably July 30 for the NASDAQ), and we will now see more rallying into our next reversal zone coming up Aug. 20 - 28. We are still watching carefully for a major cycle top and a significant correction to follow. We may see that top and an opportunity to sell short in the next reversal zone. On the sidelines of this market for now.
Today is the last day of our reversal zone for precious metals. Yesterday gold made a new weekly low at $1203.90 while silver stayed above its low from last week (and also above its July 19 low of $15.18) so we still have a bullish divergence signal for this market. The U.S. Dollar Index is also in a reversal zone (it ends Thursday) and the dollar may be rolling over from yesterday's high of 95.36 (there is strong resistance at 95 - 95.5). If the dollar falls it will boost gold and silver prices. There is a good chance precious metals will rally now, but if gold makes new lows after today (and especially if accompanied by new lows in silver), then prices could fall into the next reversal zone for precious metals coming up Aug. 20 - 28 (same as for equities). Holding my long position in gold but ready to bail out if prices turn south. Still on the sidelines of silver.
We are also leaving our reversal zone for crude oil today, but another one is coming up fast (Aug. 15 - 23). Crude's sub-cycle patterns are a little confusing right now so I am just going to focus on this next reversal zone. If prices rally into it and challenge the recent July 10 high of $72.98 (Sept. contract chart), it will be an opportunity to sell short. If instead crude falls to a new low (and stays above $63), we may consider buying. The top of a longer-term three year cycle in crude is due (and may have even happened with the high of July 10) so we are more interested in selling short this market than going long (any buying would be for a short-term rally). On the sidelines of crude oil for now.
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