MARKETS UPDATE (10:00 pm EDT)
All three broad stock market indices (DOW, S&P 500, NASDAQ) may be finding some support now as investors and traders await tomorrow's 2:00 PM statements from the Fed concluding this month's FOMC meeting. Dovish rhetoric from the Fed might kick-start a rally, while hawkish rhetoric could send this market tumbling down again. The DOW and S&P 500 medium-term cycles are old enough to form their final bottoms here (although that would be a bit early), but the NASDAQ's final bottom isn't due due for several more weeks (unless it contracts). Even if these indices rally now, that rally may not get very far before turning down again. Any traders who have short positions in the DOW or S&P 500 may consider taking some profits now, but I am going to keep my full short position in the NASDAQ until I see stronger signs of a final cycle bottom.
It looks like gold and silver both started new medium-term cycles with their lows on Dec. 15. A normal sub-cycle correction is due in both gold and silver ether this week or next. Today, gold made a new weekly high but silver did not which creates bearish divergence between the two metals. A significant correction in gold could start now (silver has already moved down from last Thursday's high). These cycles are young (only 6 weeks old) and potentially quite bullish longer-term.. We will watch for buy spots in both metals this week and next as long as prices don't fall too low. Good corrective targets to buy could be around $1800 in gold and $23 in silver. We are on the sidelines of both metals for now.
Crude oil prices are rising today from yesterday's low of $81.90 (March. contract chart). We have been watching for a corrective low to buy, but the two-day drop to yesterday.'s low was not significant enough for me to jump aboard (most significant sub-cycle corrections in bullish markets last 3-8 days). While it's possible that may have been a sub-cycle "dip", I would prefer to see a deeper correction before going long. We will stay on the sidelines of crude for now.
All three broad stock market indices (DOW, S&P 500, NASDAQ) may be finding some support now as investors and traders await tomorrow's 2:00 PM statements from the Fed concluding this month's FOMC meeting. Dovish rhetoric from the Fed might kick-start a rally, while hawkish rhetoric could send this market tumbling down again. The DOW and S&P 500 medium-term cycles are old enough to form their final bottoms here (although that would be a bit early), but the NASDAQ's final bottom isn't due due for several more weeks (unless it contracts). Even if these indices rally now, that rally may not get very far before turning down again. Any traders who have short positions in the DOW or S&P 500 may consider taking some profits now, but I am going to keep my full short position in the NASDAQ until I see stronger signs of a final cycle bottom.
It looks like gold and silver both started new medium-term cycles with their lows on Dec. 15. A normal sub-cycle correction is due in both gold and silver ether this week or next. Today, gold made a new weekly high but silver did not which creates bearish divergence between the two metals. A significant correction in gold could start now (silver has already moved down from last Thursday's high). These cycles are young (only 6 weeks old) and potentially quite bullish longer-term.. We will watch for buy spots in both metals this week and next as long as prices don't fall too low. Good corrective targets to buy could be around $1800 in gold and $23 in silver. We are on the sidelines of both metals for now.
Crude oil prices are rising today from yesterday's low of $81.90 (March. contract chart). We have been watching for a corrective low to buy, but the two-day drop to yesterday.'s low was not significant enough for me to jump aboard (most significant sub-cycle corrections in bullish markets last 3-8 days). While it's possible that may have been a sub-cycle "dip", I would prefer to see a deeper correction before going long. We will stay on the sidelines of crude for now.
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