Based on my analysis from yesterday's blog post, today looks like a good time to sell short the broad stock market. We are in the dead center of a reversal zone (which ends Friday), and the S&P 500 is breaking above its June high today while the DOW and NASDAQ are still below their highs from June so we now have our bearish divergence signal to sell. (The NASDAQ is actually on the verge of breaking above its high and could easily do so before the week is up, but the DOW is well below its high.) As I mentioned in yesterday's blog, any correction here will probably be the strongest in the DOW (because the S&P 500 and NASDAQ may have already started new cycles on June 28). For that reason it would be best to short sell the DOW (using an inverse DOW index fund or ETF) for this trade. Entering a short position in the broad stock market (DOW) today. I am going to set a stop loss for this trade on a weekly close above 25,150 in the DOW or if the DOW exceeds its June high (25,403) any day this week.
It also looks like a good time to buy gold and silver for a possible short-term (but steep) rally in both metals from an isolated low this week as discussed in yesterday's blog. We are in the center of a reversal zone for precious metals (it ends Friday), and that isolated low may be forming now as gold and silver prices are down today. I am going to go long in both metals today with a stop loss based on both gold and silver breaking below their December lows. That would be $1236 for gold and $15.638 for silver. Entering a long position in gold and silver today.
Crude oil prices are edging up to $74 today so I am going to take profits here and sell my long position in crude. Last Tuesday's high at $75.27 could easily be a top even though we could still see a higher price (or double top) in this week's reversal zone. We have done well with this trade (we bought crude on June 5 at $65) so it seems like a good time to take profits (especially considering the broad stock market could turn down now and possibly pull crude down with it). Selling my long position in crude today.