MARKETS UPDATE (11:30 pm EDT)
The broad stock market rallied into the July 4th holiday with the S&P 500 and NASDAQ both making new all-time highs inside a new reversal zone (July 2 -10). The DOW came close, but it did not make a new all-time high. Thus our strong bearish divergence signal between these indices persists. All three indices are now backing down a bit from last week's highs. If they continue down, we will consider last week's top to be significant, but this market looks like it could rally some more before taking a significant correction. We have a second reversal zone from July 9 - 18 overlapping with our first one, so there is plenty of time for this market to make another high, or a low, or even both inside this window of time. I am staying on the sidelines of this market for now.
Currently both gold and silver prices seem reluctant to rally, but also reluctant to fall. Gold made an isolated high last Thursday inside our general reversal zone, so it may be starting a significant turn down. We have been waiting for a longer-term cycle low in gold close to $3000, which is due any time now. Let's see if that happens inside our wide general reversal zone (July 2 - 18). If we get a new all-time high instead, we may have to wait for the next reversal zone specifically for gold and silver coming up July 15 - 24 to get that final low in gold.
It is late in silver's current medium-term cycle, and it may have made a final "double-top" high on Monday at $37.20 (close to the high of $37.29 on June 18). If so, a significant correction to the final cycle bottom could be starting. If not, we could get a new high, also inside our current reversal zone. We may get an opportunity to sell short if a new high is made. If not, I am going to wait for the final cycle bottom for a possible spot to buy. I am on the sidelines of both gold and silver for now.
In my last blog on crude oil (June 29) I wrote:
"...We are also inside a wide reversal zone specifically for crude that should last at least through July 10. The current medium-term cycle looks bullish, but June's price surge is clearly the result of geopolitical tensions, and the cycle's trend could quickly turn bearish at the drop of a hat. Last week's dramatic plunge in prices is right on time for a sharp sub-cycle correction that often comes near the mid-point of a cycle, and we are inside a reversal zone, so a bottom and sharp rally back up could be imminent."
Well, we are now near the end of crude's reversal zone (July 10) and prices haven't rallied very strongly from that sharp drop and low on June 24 ($64). An isolated high today or over the next two days could be the turning point for prices to rollover again and drop to new lows, turning the cycle's trend bearish. I am remaining on the sidelines of crude oil.
The broad stock market rallied into the July 4th holiday with the S&P 500 and NASDAQ both making new all-time highs inside a new reversal zone (July 2 -10). The DOW came close, but it did not make a new all-time high. Thus our strong bearish divergence signal between these indices persists. All three indices are now backing down a bit from last week's highs. If they continue down, we will consider last week's top to be significant, but this market looks like it could rally some more before taking a significant correction. We have a second reversal zone from July 9 - 18 overlapping with our first one, so there is plenty of time for this market to make another high, or a low, or even both inside this window of time. I am staying on the sidelines of this market for now.
Currently both gold and silver prices seem reluctant to rally, but also reluctant to fall. Gold made an isolated high last Thursday inside our general reversal zone, so it may be starting a significant turn down. We have been waiting for a longer-term cycle low in gold close to $3000, which is due any time now. Let's see if that happens inside our wide general reversal zone (July 2 - 18). If we get a new all-time high instead, we may have to wait for the next reversal zone specifically for gold and silver coming up July 15 - 24 to get that final low in gold.
It is late in silver's current medium-term cycle, and it may have made a final "double-top" high on Monday at $37.20 (close to the high of $37.29 on June 18). If so, a significant correction to the final cycle bottom could be starting. If not, we could get a new high, also inside our current reversal zone. We may get an opportunity to sell short if a new high is made. If not, I am going to wait for the final cycle bottom for a possible spot to buy. I am on the sidelines of both gold and silver for now.
In my last blog on crude oil (June 29) I wrote:
"...We are also inside a wide reversal zone specifically for crude that should last at least through July 10. The current medium-term cycle looks bullish, but June's price surge is clearly the result of geopolitical tensions, and the cycle's trend could quickly turn bearish at the drop of a hat. Last week's dramatic plunge in prices is right on time for a sharp sub-cycle correction that often comes near the mid-point of a cycle, and we are inside a reversal zone, so a bottom and sharp rally back up could be imminent."
Well, we are now near the end of crude's reversal zone (July 10) and prices haven't rallied very strongly from that sharp drop and low on June 24 ($64). An isolated high today or over the next two days could be the turning point for prices to rollover again and drop to new lows, turning the cycle's trend bearish. I am remaining on the sidelines of crude oil.
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