MARKETS UPDATE (4:00 pm EST)
Last Friday the NASDAQ finally broke above it's Nov. 2021 all-time high (16,212) to make a new all-time high at 16,302. This means that the strong bearish divergence signal between the NASDAQ, DOW and S&P 500 is now negated. Although this weakens the case for an imminent catastrophic "crash" in equities, it does not eliminate that possibility. There are still several technical signals and cycle patterns that point to the end of a long-term 90 year cycle now that could lead to a severe correction (as much as 90%). Even if the 90 year cycle "crash" does not play out (the last one was in 1929), we are approaching the end of several other cycles that could also give us a significant correction that will likely start before the end of this year.
Shorter term, the current medium-term cycles in the DOW, S&P 500, and NASDAQ are very "long in the tooth" and overdue for their final corrective bottoms. Last Friday's highs in the NASDAQ and S&P 500 were new weekly highs, but the DOW's last high was in the previous week, so we have another short-term bearish divergence signal. Also, the S&P 500 made a new weekly high yesterday without the other two indices, and all three are heavily down today (more bearish divergence). Last Friday was barely inside our strong reversal zone, but we are now inside another (weaker) reversal zone (March 1 - 11), so the final tops could be in place here. Let's see if this market can take a decent correction now and give us a potential spot to buy near the final medium-term cycle bottoms. We expect more strong rallying from those bottoms into the summer. We are still on the sidelines of this market.
Gold and silver prices have been exploding upwards since last Friday. This confirms the idea that both metals started new medium-term cycles from their lows on Feb. 14 ($1986 in gold and $21.94 in silver). Today gold is breaking above it's previous all-time high from last December ($2123) which confirms that a bullish trend is in place. Although gold could take a corrective breather now as it tests this high, it is still early in the new cycle, so we may look to go long on any dips. For now, we remain on the sidelines of gold.
We were able to buy silver last Friday before its massive surge up yesterday, but this rally may be hampered by a strong resistance line around $24. As with gold, it is early in this new medium-term cycle and the trend looks bullish, so we won't worry about any short-term dips unless they start to break back below the 15-day and 45-day moving averages. Let's stay with our long position in silver for now.
The U.S. Dollar Index made an isolated high last Friday (104.29), and it's been down from there. That high was near the center of a reversal zone specifically for currencies Feb. 28 - March 7, so more downside is possible. If the greenback falls lower, it will help boost precious metal prices.
It looks like crude oil is well into a medium-term cycle that began with the low of $68.57 (April contract chart) on Dec. 13, 2023. A significant sub-cycle correction occurred on Feb. 5 ($71.49), and another one is now due. This market looks very bullish, and we are looking for an opportunity to go long on any significant corrections down. We are now in the middle of an unusually long reversal zone for crude (Feb. 21 - March 13), so a top could form anytime with a sharp correction down to follow. There is resistance around $80, so last Friday's isolated high at $80.85 may be significant. Let's see if prices can move lower before we consider any buying. We are still on the sidelines of crude oil.
Last Friday the NASDAQ finally broke above it's Nov. 2021 all-time high (16,212) to make a new all-time high at 16,302. This means that the strong bearish divergence signal between the NASDAQ, DOW and S&P 500 is now negated. Although this weakens the case for an imminent catastrophic "crash" in equities, it does not eliminate that possibility. There are still several technical signals and cycle patterns that point to the end of a long-term 90 year cycle now that could lead to a severe correction (as much as 90%). Even if the 90 year cycle "crash" does not play out (the last one was in 1929), we are approaching the end of several other cycles that could also give us a significant correction that will likely start before the end of this year.
Shorter term, the current medium-term cycles in the DOW, S&P 500, and NASDAQ are very "long in the tooth" and overdue for their final corrective bottoms. Last Friday's highs in the NASDAQ and S&P 500 were new weekly highs, but the DOW's last high was in the previous week, so we have another short-term bearish divergence signal. Also, the S&P 500 made a new weekly high yesterday without the other two indices, and all three are heavily down today (more bearish divergence). Last Friday was barely inside our strong reversal zone, but we are now inside another (weaker) reversal zone (March 1 - 11), so the final tops could be in place here. Let's see if this market can take a decent correction now and give us a potential spot to buy near the final medium-term cycle bottoms. We expect more strong rallying from those bottoms into the summer. We are still on the sidelines of this market.
Gold and silver prices have been exploding upwards since last Friday. This confirms the idea that both metals started new medium-term cycles from their lows on Feb. 14 ($1986 in gold and $21.94 in silver). Today gold is breaking above it's previous all-time high from last December ($2123) which confirms that a bullish trend is in place. Although gold could take a corrective breather now as it tests this high, it is still early in the new cycle, so we may look to go long on any dips. For now, we remain on the sidelines of gold.
We were able to buy silver last Friday before its massive surge up yesterday, but this rally may be hampered by a strong resistance line around $24. As with gold, it is early in this new medium-term cycle and the trend looks bullish, so we won't worry about any short-term dips unless they start to break back below the 15-day and 45-day moving averages. Let's stay with our long position in silver for now.
The U.S. Dollar Index made an isolated high last Friday (104.29), and it's been down from there. That high was near the center of a reversal zone specifically for currencies Feb. 28 - March 7, so more downside is possible. If the greenback falls lower, it will help boost precious metal prices.
It looks like crude oil is well into a medium-term cycle that began with the low of $68.57 (April contract chart) on Dec. 13, 2023. A significant sub-cycle correction occurred on Feb. 5 ($71.49), and another one is now due. This market looks very bullish, and we are looking for an opportunity to go long on any significant corrections down. We are now in the middle of an unusually long reversal zone for crude (Feb. 21 - March 13), so a top could form anytime with a sharp correction down to follow. There is resistance around $80, so last Friday's isolated high at $80.85 may be significant. Let's see if prices can move lower before we consider any buying. We are still on the sidelines of crude oil.
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