IMPORTANT UPDATES ON THE BROAD STOCK MARKET and PRECIOUS METALS (7:30 pm EDT)
In last Thursday's post on the broad stock market I wrote:
"It looks like the DOW, S&P 500, and NASDAQ may all be falling to the final bottoms of their current medium-term cycles. Usually this involves a 2 - 5 week fall...We note that our current reversal zone ends next Monday. We could see a temporary low by then, but any bounce would probably be minor before these indices resume their descent. A serious sell-off may be starting, but if prices don't go too low and stabilize between now and mid-August, we could see another rally that may or may not make new all-time highs."
All of this still applies. All three indices (DOW, S&P 500, NASDAQ) rallied from lows on July 25, but those rallies may be waning now and ready to turn back down. The S&P 500 and NASDAQ are remaining below their 45-day and 15-day moving averages as they test resistance at the 45-day moving average today. The DOW, however, is looking a bit more bullish. It is still above both its 45-day and 15-day moving averages, and it is approaching resistance around 41,000. Unlike the S&P 500 and especially the NASDAQ, the DOW is not far from its all-time high (41,376 on July 18). If it does make a new high without the other two, that would be a VERY strong bearish divergence signal. We need to keep in mind that we are expecting a final top in a longer-term 4-year cycle by the end of August which should be followed by a long and deep correction (16% - 26%) down into the end of the year. The top may already be in with the July 11th all-time high in the NASDAQ and the July 16th all-time high in the S&P 500 (and maybe even the July 18 all-time high in the DOW). Needless to say, I am on the sidelines of this market for now, but I may be considering short-selling the broad stock market soon.
Gold and silver most likely started new medium-term cycles on June 7 (gold's low at $2287) and June 26 (silver's low at $28.62). These cycles are relatively young (especially silver), but they may be peaking early and starting a steep corrective fall to the bottom of a longer-term cycle (similar to what is happening in the broad stock market). I expect the end of gold's current medium-term cycle to overlap with a longer-term (1-year) cycle between late August and mid-November. This should be a fairly steep drop so we may want to sell short. The current medium-term cycle in gold made a new all-time high ($2482) on July 17. A sub-cycle correction from there found support at the 45-day moving average last week. If gold's current rally can't make a new all-time high soon, it may be a good time to sell it short.
Silver is looking more bearish than gold as its price has already broken below the start of its new medium-term cycle. That turns the trend of this cycle bearish (and suggests that gold may be bearish as well). We are anticipating the end of a longer-term (4.33 year) cycle in silver by the end of this year or possibly in early 2025. That longer-term bottom will overlap with either the current medium-term cycle or possibly the next one. Either way, we should probably be looking to sell this market short soon as the current medium-term cycle has already turned bearish.
I am remaining on the sidelines of both gold and silver for now.
In last Thursday's post on the broad stock market I wrote:
"It looks like the DOW, S&P 500, and NASDAQ may all be falling to the final bottoms of their current medium-term cycles. Usually this involves a 2 - 5 week fall...We note that our current reversal zone ends next Monday. We could see a temporary low by then, but any bounce would probably be minor before these indices resume their descent. A serious sell-off may be starting, but if prices don't go too low and stabilize between now and mid-August, we could see another rally that may or may not make new all-time highs."
All of this still applies. All three indices (DOW, S&P 500, NASDAQ) rallied from lows on July 25, but those rallies may be waning now and ready to turn back down. The S&P 500 and NASDAQ are remaining below their 45-day and 15-day moving averages as they test resistance at the 45-day moving average today. The DOW, however, is looking a bit more bullish. It is still above both its 45-day and 15-day moving averages, and it is approaching resistance around 41,000. Unlike the S&P 500 and especially the NASDAQ, the DOW is not far from its all-time high (41,376 on July 18). If it does make a new high without the other two, that would be a VERY strong bearish divergence signal. We need to keep in mind that we are expecting a final top in a longer-term 4-year cycle by the end of August which should be followed by a long and deep correction (16% - 26%) down into the end of the year. The top may already be in with the July 11th all-time high in the NASDAQ and the July 16th all-time high in the S&P 500 (and maybe even the July 18 all-time high in the DOW). Needless to say, I am on the sidelines of this market for now, but I may be considering short-selling the broad stock market soon.
Gold and silver most likely started new medium-term cycles on June 7 (gold's low at $2287) and June 26 (silver's low at $28.62). These cycles are relatively young (especially silver), but they may be peaking early and starting a steep corrective fall to the bottom of a longer-term cycle (similar to what is happening in the broad stock market). I expect the end of gold's current medium-term cycle to overlap with a longer-term (1-year) cycle between late August and mid-November. This should be a fairly steep drop so we may want to sell short. The current medium-term cycle in gold made a new all-time high ($2482) on July 17. A sub-cycle correction from there found support at the 45-day moving average last week. If gold's current rally can't make a new all-time high soon, it may be a good time to sell it short.
Silver is looking more bearish than gold as its price has already broken below the start of its new medium-term cycle. That turns the trend of this cycle bearish (and suggests that gold may be bearish as well). We are anticipating the end of a longer-term (4.33 year) cycle in silver by the end of this year or possibly in early 2025. That longer-term bottom will overlap with either the current medium-term cycle or possibly the next one. Either way, we should probably be looking to sell this market short soon as the current medium-term cycle has already turned bearish.
I am remaining on the sidelines of both gold and silver for now.
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