MARKETS UPDATE (12:30 pm EST)
The broad stock market is most likely now falling into the first significant sub-cycle correction of its new medium-term cycle which should bottom in the upcoming reversal zone of March 22 - April 2. The depth of this correction will determine the longer-term trend of this market for the next several months. To stay bullish, the DOW should hold above 24,100, and especially above 23,360. Any break below 23,360 would turn this market bearish and it would be headed down for at least 7 more weeks. For the S&P 500 to stay bullish, we would expect a correction into the 2,650 - 2,700 range. We don't want to see it break below 2,532 as that would be very bearish. Right now I am favoring the bullish view so we will watch for a bottom near the end of this week or into next week to buy above 23,360 in the DOW and above 2,532 in the S&P 500. Still on the sidelines.
Gold and silver prices are still holding above support levels just above $1300 in gold and $16 in silver. The U.S. Dollar Index seems to be attempting another rally into that 90 - 91 resistance zone, and we are now entering another reversal zone specifically for currencies (March 20 - April 2). The greenback could make a new high here, but if it can't break above 91 it will likely fall again. Any short-term rally in the dollar will depress gold and silver prices so we are watching this situation carefully in case we need to bail out of our current long position in gold. Right now the longer-term charts for gold and silver still look very bullish, and the long-term chart for the U.S. dollar is very bearish. Holding my long position in gold but still out of silver.
Crude oil prices are up strongly today and are close to testing the $64.24 high of Feb. 26 (April contract chart). As I stated in Sunday's blog, if crude can exceed that high then the trend could turn bullish and push prices above $70 soon; however, if prices stay below that high and back down again then the market could turn bearish (especially if prices break below $57.90). We remain on the sidelines as we watch how this unfolds.
The broad stock market is most likely now falling into the first significant sub-cycle correction of its new medium-term cycle which should bottom in the upcoming reversal zone of March 22 - April 2. The depth of this correction will determine the longer-term trend of this market for the next several months. To stay bullish, the DOW should hold above 24,100, and especially above 23,360. Any break below 23,360 would turn this market bearish and it would be headed down for at least 7 more weeks. For the S&P 500 to stay bullish, we would expect a correction into the 2,650 - 2,700 range. We don't want to see it break below 2,532 as that would be very bearish. Right now I am favoring the bullish view so we will watch for a bottom near the end of this week or into next week to buy above 23,360 in the DOW and above 2,532 in the S&P 500. Still on the sidelines.
Gold and silver prices are still holding above support levels just above $1300 in gold and $16 in silver. The U.S. Dollar Index seems to be attempting another rally into that 90 - 91 resistance zone, and we are now entering another reversal zone specifically for currencies (March 20 - April 2). The greenback could make a new high here, but if it can't break above 91 it will likely fall again. Any short-term rally in the dollar will depress gold and silver prices so we are watching this situation carefully in case we need to bail out of our current long position in gold. Right now the longer-term charts for gold and silver still look very bullish, and the long-term chart for the U.S. dollar is very bearish. Holding my long position in gold but still out of silver.
Crude oil prices are up strongly today and are close to testing the $64.24 high of Feb. 26 (April contract chart). As I stated in Sunday's blog, if crude can exceed that high then the trend could turn bullish and push prices above $70 soon; however, if prices stay below that high and back down again then the market could turn bearish (especially if prices break below $57.90). We remain on the sidelines as we watch how this unfolds.
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