UPDATES ON THE BROAD STOCK MARKET and GOLD AND SILVER (10:30 pm EDT)
As I pointed out in last Wednesday's blog on the broad stock market, it is late in the current medium-term cycles of all three market indices (DOW, S&P 500, NASDAQ), and that means we should be seeing a final top soon followed by a final 2 - 5 week correction down to the cycle bottoms. Today and yesterday both the S&P 500 and NASDAQ made new all-time highs, but the DOW has not even made a new weekly high and is still below its all-time high (45,073) from last year. Thus our intermarket bearish divergence signal continues to be valid, and a sharp turn down could be imminent. The next strong general reversal zone is coming up in the second half of next week (Aug. 6 - 13), but there is a weak reversal zone this week, so we could see a significant top this week followed by a sharp correction to a final bottom into that strong reversal window. If the correction isn't too deep, it could be a buying opportunity. For now, I'm remaining on the sidelines of this market.
Gold may have started a new medium-term cycle with its low of $3256 on June 30, but it's more likely that gold is late in an older cycle that began on April 7 ($2961). In either labeling, gold's trend is looking bearish - especially because a longer-term (31 month) cycle bottom is now due that could take prices down to the $3000 level. Gold prices have been moving down since last Wednesday, and I think they can go lower. The only thing that would turn this market bullish right now would be a break above the all-time high around $3500 ($3496), but I don't think that is going to happen, at least in the short-term. Next week we enter a new reversal zone specifically for gold and silver (Aug. 5 - 14). That would be a good time for a significant cycle bottom. If we get one, it may be a good opportunity to buy. I am still on the sidelines of gold.
It is very late in the current medium-term cycle of silver. The final top in this cycle may have already happened with last Wednesday's high at $39.50, which was inside a reversal zone specifically for gold and silver. If that's the case, we could now see a multi-week decline to the $35 area, and that would be a good spot to buy - especially if it happens inside the upcoming reversal zone for the precious metals (Aug. 5 - 14). We can't, however, rule out another surge up to test the $40 line. If that happens, we could get a high instead of a low in the new reversal zone, but that would be followed by the final cycle correction. In that scenario, we would have to wait a bit longer for the final cycle bottom near $35. For now, we remain on the sideline of silver.
As I pointed out in last Wednesday's blog on the broad stock market, it is late in the current medium-term cycles of all three market indices (DOW, S&P 500, NASDAQ), and that means we should be seeing a final top soon followed by a final 2 - 5 week correction down to the cycle bottoms. Today and yesterday both the S&P 500 and NASDAQ made new all-time highs, but the DOW has not even made a new weekly high and is still below its all-time high (45,073) from last year. Thus our intermarket bearish divergence signal continues to be valid, and a sharp turn down could be imminent. The next strong general reversal zone is coming up in the second half of next week (Aug. 6 - 13), but there is a weak reversal zone this week, so we could see a significant top this week followed by a sharp correction to a final bottom into that strong reversal window. If the correction isn't too deep, it could be a buying opportunity. For now, I'm remaining on the sidelines of this market.
Gold may have started a new medium-term cycle with its low of $3256 on June 30, but it's more likely that gold is late in an older cycle that began on April 7 ($2961). In either labeling, gold's trend is looking bearish - especially because a longer-term (31 month) cycle bottom is now due that could take prices down to the $3000 level. Gold prices have been moving down since last Wednesday, and I think they can go lower. The only thing that would turn this market bullish right now would be a break above the all-time high around $3500 ($3496), but I don't think that is going to happen, at least in the short-term. Next week we enter a new reversal zone specifically for gold and silver (Aug. 5 - 14). That would be a good time for a significant cycle bottom. If we get one, it may be a good opportunity to buy. I am still on the sidelines of gold.
It is very late in the current medium-term cycle of silver. The final top in this cycle may have already happened with last Wednesday's high at $39.50, which was inside a reversal zone specifically for gold and silver. If that's the case, we could now see a multi-week decline to the $35 area, and that would be a good spot to buy - especially if it happens inside the upcoming reversal zone for the precious metals (Aug. 5 - 14). We can't, however, rule out another surge up to test the $40 line. If that happens, we could get a high instead of a low in the new reversal zone, but that would be followed by the final cycle correction. In that scenario, we would have to wait a bit longer for the final cycle bottom near $35. For now, we remain on the sideline of silver.
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