MARKETS UPDATE (4:30 pm EDST)
Uncertainty about whether or not the Fed will announce a pause in rate hiking this Wednesday (following this week's FOMC meeting) could be spooking the markets today. The DOW dropped over 400 points this morning, but it recovered some of that loss at the closing bell. After this morning's dip, all three indices bounced up from strong "round number" support lines around 33,500 in the DOW, 4,100 in the S&P 500, and 12,000 in the NASDAQ. The DOW and S&P 500 closed back below their 15-day moving averages, but the NASDAQ managed to close above its 15-day moving average (after dipping briefly below it). Today's drop may just be market 'jitters", but if the Fed's rhetoric on Wednesday afternoon is hawkish (i.e. no signs of a pause in rate hiking), we could see a more serious sell-off (though even that might be temporary as Wall Street often recovers from Fed rhetoric rather quickly).
I am going to hold my long position in the broad stock market for now. If those support lines mentioned above start to break, there is another support line near the 45-day moving averages of all three indices. That would be 33,000 for the DOW, 4,050 in the S&P 500, and 11,800 in the NASDAQ. We can use these levels as stop loss points for our current long position in this market.
Gold and silver rallied strongly today with both finally closing above their 15-day moving averages. This is supporting the idea that gold had its sub-cycle bottom at $1970 on April 19 and silver's sub-cycle bottom was on April 25 at $24.53. If that's the case, we can expect both metals to rally and challenge their previous highs of $2047 in gold and $26.07 in silver. Let's hold our long position in gold for now and stay on the sidelines of silver until that previous high is broken.
Crude oil prices took their cue from the broad stock market (or vice-versa) today and plunged steeply. Prices are now approaching support around $70. If they hold in that area, we may have a good spot to buy. But if prices continue lower and break below $65, the market would be turning bearish and we would have to re-examine our trading strategies for this market. We remain on the sidelines of crude oil.
Uncertainty about whether or not the Fed will announce a pause in rate hiking this Wednesday (following this week's FOMC meeting) could be spooking the markets today. The DOW dropped over 400 points this morning, but it recovered some of that loss at the closing bell. After this morning's dip, all three indices bounced up from strong "round number" support lines around 33,500 in the DOW, 4,100 in the S&P 500, and 12,000 in the NASDAQ. The DOW and S&P 500 closed back below their 15-day moving averages, but the NASDAQ managed to close above its 15-day moving average (after dipping briefly below it). Today's drop may just be market 'jitters", but if the Fed's rhetoric on Wednesday afternoon is hawkish (i.e. no signs of a pause in rate hiking), we could see a more serious sell-off (though even that might be temporary as Wall Street often recovers from Fed rhetoric rather quickly).
I am going to hold my long position in the broad stock market for now. If those support lines mentioned above start to break, there is another support line near the 45-day moving averages of all three indices. That would be 33,000 for the DOW, 4,050 in the S&P 500, and 11,800 in the NASDAQ. We can use these levels as stop loss points for our current long position in this market.
Gold and silver rallied strongly today with both finally closing above their 15-day moving averages. This is supporting the idea that gold had its sub-cycle bottom at $1970 on April 19 and silver's sub-cycle bottom was on April 25 at $24.53. If that's the case, we can expect both metals to rally and challenge their previous highs of $2047 in gold and $26.07 in silver. Let's hold our long position in gold for now and stay on the sidelines of silver until that previous high is broken.
Crude oil prices took their cue from the broad stock market (or vice-versa) today and plunged steeply. Prices are now approaching support around $70. If they hold in that area, we may have a good spot to buy. But if prices continue lower and break below $65, the market would be turning bearish and we would have to re-examine our trading strategies for this market. We remain on the sidelines of crude oil.
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