"...I don't think the cycle will turn bearish as long as the DOW stays above 32,000 (and especially 30,000) and the S&P 500 remains above 3,800. We also don't want to see the NASDAQ fall below 12,397 as that would be a bearish sign. I am still anticipating a significant top in these indices in our next reversal zone coming up April 20 - 29 which could turn out to be an ideal spot to sell this market short."
Those support levels are holding as the market continues to rally this week. Today the S&P 500 and NASDAQ both made new weekly highs while the DOW didn't. This is a bearish divergence signal unless the DOW can push above last week's high of 33,811 over the next few days (it is very close). We still have a longer-term bearish divergence signal in place as the NASDAQ is still below its Feb. 16 all-time high of 14,167. We might see a modest short-term correction this week, but I am still going with the idea of a bullish rally into our next reversal zone coming up next week (April 20 - 29). We will remain on the sidelines of this market for now.
Gold and silver are rallying a bit this week, but not strongly. Last week gold got briefly above our resistance level of $1754, but is now back below it. This reluctance to rally strongly suggests that both metals are still completing older cycles and will move lower to their final bottoms soon. Our next reversal zone specifically for the precious metals is coming up April 22 - 30 and overlaps with our reversal zone for equities April 20 -29. If we don't see prices rally strongly soon, we will assume that reversal zone will coincide with a significant cycle bottom and a possible spot to buy. We are still on the sidelines of both metals.
We are now at the center of a reversal zone specifically for crude oil (April 7 -16). It is still possible that crude started a new medium-term cycle with its March 23 low of $57.25 (May contract chart), but new cycles usually rally strongly, and this one has remained relatively flat (so far). There is still time for the cycle to go lower (or make a double bottom), but it has to do so by Friday to be within the current reversal zone (unless it pushes into next week's reversal zone for equities and the precious metals). If the broad stock market takes a corrective dip this week, crude may follow and give us another bottom and potential spot to buy. Let's remain on the sidelines for now.