MARKETS UPDATE (7:00 pm EST)
We've determined that all three of our broad stock market indices started new medium-term cycles with their late October lows (32,327, 4,104, and 12,544 in the DOW, S&P 500, and NASDAQ, respectively). These indices also most likely started a new longer-term (50 week) cycle with those lows. This means this market could be quite bullish into the end of this year and start of 2024. We have seen a steep multi-week rally from those Oct. lows with all three indices now exceeding their late summer highs. This rally is now entitled to a corrective 'breather", and we could see one anytime over the next few weeks. We could even see a top and the start of a sub-cycle correction this week as we are still inside a mild reversal zone (Nov. 14 - 23). We remain on the sidelines as we watch for any significant corrective sub-cycle lows to buy.
After a corrective dip yesterday, gold rallied strongly today to make a new weekly high as well as challenge its previous high from Oct. 27 ($2009). We need to see that high broken to confirm the current medium-term cycle as bullish. We note that as gold made a new weekly high today, silver did not (bearish divergence), so another corrective dip could be imminent. Because both metals are trending bullish, our trading strategy now is to hold our long position in gold (unless it starts closing back below the 15-day moving average - now around $1971 - before it breaks above $2009), and to look to buy silver on any significant corrective low. Thus we are holding our gold long position and staying on the sidelines of silver for now.
After its deep low from last week ($72.37 - Jan. 2024 contract chart), crude oil prices are bubbling up a bit and testing their 15-day moving average. We are staying out of crude for now as the medium-term cycle trend has turned very bearish, and we expect lower prices until the cycle forms its final bottom. If the current cycle began on Aug. 23, that bottom may not be far away. We will watch for it as a potential buy spot as the longer-term cycles in crude still look bullish.
We've determined that all three of our broad stock market indices started new medium-term cycles with their late October lows (32,327, 4,104, and 12,544 in the DOW, S&P 500, and NASDAQ, respectively). These indices also most likely started a new longer-term (50 week) cycle with those lows. This means this market could be quite bullish into the end of this year and start of 2024. We have seen a steep multi-week rally from those Oct. lows with all three indices now exceeding their late summer highs. This rally is now entitled to a corrective 'breather", and we could see one anytime over the next few weeks. We could even see a top and the start of a sub-cycle correction this week as we are still inside a mild reversal zone (Nov. 14 - 23). We remain on the sidelines as we watch for any significant corrective sub-cycle lows to buy.
After a corrective dip yesterday, gold rallied strongly today to make a new weekly high as well as challenge its previous high from Oct. 27 ($2009). We need to see that high broken to confirm the current medium-term cycle as bullish. We note that as gold made a new weekly high today, silver did not (bearish divergence), so another corrective dip could be imminent. Because both metals are trending bullish, our trading strategy now is to hold our long position in gold (unless it starts closing back below the 15-day moving average - now around $1971 - before it breaks above $2009), and to look to buy silver on any significant corrective low. Thus we are holding our gold long position and staying on the sidelines of silver for now.
After its deep low from last week ($72.37 - Jan. 2024 contract chart), crude oil prices are bubbling up a bit and testing their 15-day moving average. We are staying out of crude for now as the medium-term cycle trend has turned very bearish, and we expect lower prices until the cycle forms its final bottom. If the current cycle began on Aug. 23, that bottom may not be far away. We will watch for it as a potential buy spot as the longer-term cycles in crude still look bullish.
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