MARKETS UPDATE (2:52 am EST)
This is a holiday week in the U.S. (not the whole week, but the upcoming Fourth of July weekend) which usually means light trading in financial markets and often an optimistic bullish mood in the broad stock market (but not always). Traders and investors need to be alert, though, because this month of July may see some major turning points in all financial markets according to technical studies, cycles and timing factors. This should be encouraging for traders who are tired of sitting on the sidelines recently (myself among them) due to the fact that many markets are not giving us clear directional signals.
We are right in the middle of a time window (which extends to early next week) for major reversals in all financial markets so we need to be especially alert this week for directional changes. The broad stock market indices (DOW S&P 500, NASDAQ) all made new weekly highs early today before turning down and losing much of their gain by the end of the day. This is bearish behavior so we could see more downside into the end of the week, although holiday optimism may temper any correction and even push prices a bit higher into the week. Momentum and technical signals are still rather mixed (bullish and bearish) so I am not ready to commit to any trade at the moment. Still on the sidelines of this market (but expecting some major changes soon).
My recent blogs on gold and silver have pointed out that precious metals are currently in the process of forming a major cycle bottom from which a major long-term rally will start. It is very likely we are at or close to that bottom right now and are therefore looking for signs to go long. One of those signs is upward momentum, and we still don't have that so we are not buying yet. There is some strong technical data now indicating that the final bottom in gold could be in the $1100-$1200 range (it broke a little below $1200 last week so we are there). We will wait for a shift in momentum as a signal to go long in this market. On the sidelines for now.
Crude oil seems to be recovering from its abrupt drop after Ben Bernanke's speech the week before last, but there is resistance in the $99 area and, as mentioned above, we are in a time period when major market reversals can occur and oil prices are rising into it. We will therefore stay on the sidelines and wait to see if this market will turn down from here. Momentum is still bullish.
This is a holiday week in the U.S. (not the whole week, but the upcoming Fourth of July weekend) which usually means light trading in financial markets and often an optimistic bullish mood in the broad stock market (but not always). Traders and investors need to be alert, though, because this month of July may see some major turning points in all financial markets according to technical studies, cycles and timing factors. This should be encouraging for traders who are tired of sitting on the sidelines recently (myself among them) due to the fact that many markets are not giving us clear directional signals.
We are right in the middle of a time window (which extends to early next week) for major reversals in all financial markets so we need to be especially alert this week for directional changes. The broad stock market indices (DOW S&P 500, NASDAQ) all made new weekly highs early today before turning down and losing much of their gain by the end of the day. This is bearish behavior so we could see more downside into the end of the week, although holiday optimism may temper any correction and even push prices a bit higher into the week. Momentum and technical signals are still rather mixed (bullish and bearish) so I am not ready to commit to any trade at the moment. Still on the sidelines of this market (but expecting some major changes soon).
My recent blogs on gold and silver have pointed out that precious metals are currently in the process of forming a major cycle bottom from which a major long-term rally will start. It is very likely we are at or close to that bottom right now and are therefore looking for signs to go long. One of those signs is upward momentum, and we still don't have that so we are not buying yet. There is some strong technical data now indicating that the final bottom in gold could be in the $1100-$1200 range (it broke a little below $1200 last week so we are there). We will wait for a shift in momentum as a signal to go long in this market. On the sidelines for now.
Crude oil seems to be recovering from its abrupt drop after Ben Bernanke's speech the week before last, but there is resistance in the $99 area and, as mentioned above, we are in a time period when major market reversals can occur and oil prices are rising into it. We will therefore stay on the sidelines and wait to see if this market will turn down from here. Momentum is still bullish.
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