MARKETS UPDATE (3:00 pm EST)
Last week's lows (on Friday) in the DOW and S&P 500 just touched the 15-day moving averages (the NASDAQ came close but did not touch its 15-day moving average) so that may have been a significant sub-cycle correction for those two indices. A deeper correction would have been better (and would have allowed us to buy). We could still get that if this market falls into our next reversal zone which starts tomorrow and ends late next week (Feb. 13 - 22), but today's strong rally is suggesting the broad stock market wants to go up from here. If that happens and we get new highs well into this reversal period, it will make no difference if last week's lows were or were not legitimate sub-cycle dips as we will likely have a new sub-cycle top followed by another (most likely steeper) correction and another opportunity to buy. So for now we wait and see how this market moves into the end of this week and next week. A deeper correction could give us a buy spot, but more rallying means we will have to wait a bit longer for an opportunity to buy. All of this is based on the assumption that new medium-term cycles started on Dec. 26 and that this market is now bullish for at least several more months (which is my preferred scenario for now). On the sidelines of the broad stock market.
We are also now entering a reversal zone specifically for precious metals (Nov. 12 - 21). Gold and silver prices could make either a top or bottom in this time period, but at the moment prices seem reluctant to rally, and there are some short-term technical signals suggesting prices could go lower. As with the broad stock market, we will have to wait and see how prices move this week and into next week. We may see a bottom to buy, but we also can't rule out the possibility of new highs and a top to sell short. It is late in the medium-term cycles of both gold and silver, and the final corrective bottoms to these cycles are due soon (maybe even next week). As long as those bottoms don't go too low, the precious metals market looks quite bullish. Still on the sidelines of gold and silver.
We have been waiting for a buy spot in crude oil around $50 (or lower), but today's equity rally (as well as announcements of cuts in crude oil production by Saudi Arabia and OPEC) seems to be lifting crude prices. If equity markets rally now, we may have to wait a bit longer for a dip in crude prices to buy. On the sidelines of crude oil for now.
Last week's lows (on Friday) in the DOW and S&P 500 just touched the 15-day moving averages (the NASDAQ came close but did not touch its 15-day moving average) so that may have been a significant sub-cycle correction for those two indices. A deeper correction would have been better (and would have allowed us to buy). We could still get that if this market falls into our next reversal zone which starts tomorrow and ends late next week (Feb. 13 - 22), but today's strong rally is suggesting the broad stock market wants to go up from here. If that happens and we get new highs well into this reversal period, it will make no difference if last week's lows were or were not legitimate sub-cycle dips as we will likely have a new sub-cycle top followed by another (most likely steeper) correction and another opportunity to buy. So for now we wait and see how this market moves into the end of this week and next week. A deeper correction could give us a buy spot, but more rallying means we will have to wait a bit longer for an opportunity to buy. All of this is based on the assumption that new medium-term cycles started on Dec. 26 and that this market is now bullish for at least several more months (which is my preferred scenario for now). On the sidelines of the broad stock market.
We are also now entering a reversal zone specifically for precious metals (Nov. 12 - 21). Gold and silver prices could make either a top or bottom in this time period, but at the moment prices seem reluctant to rally, and there are some short-term technical signals suggesting prices could go lower. As with the broad stock market, we will have to wait and see how prices move this week and into next week. We may see a bottom to buy, but we also can't rule out the possibility of new highs and a top to sell short. It is late in the medium-term cycles of both gold and silver, and the final corrective bottoms to these cycles are due soon (maybe even next week). As long as those bottoms don't go too low, the precious metals market looks quite bullish. Still on the sidelines of gold and silver.
We have been waiting for a buy spot in crude oil around $50 (or lower), but today's equity rally (as well as announcements of cuts in crude oil production by Saudi Arabia and OPEC) seems to be lifting crude prices. If equity markets rally now, we may have to wait a bit longer for a dip in crude prices to buy. On the sidelines of crude oil for now.
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