BRIEF UPDATE ON BROAD STOCK MARKET AND PRECIOUS METALS (2:15 pm EDST)
Leave it to the Fed to kick start a corrective dip in equities just when you need one. Today Fed chairman Jerome Powell suggested that an interest rate cut in July may not be a done deal. Because many Wall Street analysts have been expecting one, especially as there was no cut in June, the broad stock market is reacting to Powell's hawkish tone with a dive. Will this "dip" be significant? We hope so as we sold equity markets short last Friday in anticipation of a steep (but likely brief) correction. Let's see if it can follow through to our target areas (around 26,100 in the DOW and 2,850 in the S&P 500). Holding my short position in the broad stock market.
Gold continued its price rally yesterday and today and made a new high at $1437 today before backing down a bit. Silver prices have been rising too, but not so strongly, and silver did not make a new high today. Thus we have a bearish divergence signal, which could mean a corrective dip is imminent. As I mentioned in Sunday's blog, we are waiting for a dip to buy in both metals. Stay tuned. Still on the sidelines of gold and silver.
Leave it to the Fed to kick start a corrective dip in equities just when you need one. Today Fed chairman Jerome Powell suggested that an interest rate cut in July may not be a done deal. Because many Wall Street analysts have been expecting one, especially as there was no cut in June, the broad stock market is reacting to Powell's hawkish tone with a dive. Will this "dip" be significant? We hope so as we sold equity markets short last Friday in anticipation of a steep (but likely brief) correction. Let's see if it can follow through to our target areas (around 26,100 in the DOW and 2,850 in the S&P 500). Holding my short position in the broad stock market.
Gold continued its price rally yesterday and today and made a new high at $1437 today before backing down a bit. Silver prices have been rising too, but not so strongly, and silver did not make a new high today. Thus we have a bearish divergence signal, which could mean a corrective dip is imminent. As I mentioned in Sunday's blog, we are waiting for a dip to buy in both metals. Stay tuned. Still on the sidelines of gold and silver.
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