MARKETS UPDATE (10:30 pm EST)
The DOW, S&P 500, and NASDAQ (Nasdaq Composite) are all starting the trading week with new weekly highs so we are not going to get a bearish divergence signal this week. (The March contract chart for the NASDAQ 100 Index, however, did not make a new high today. We may consider this a bearish divergence signal if it stays below last week's high for the rest of the week.) Today is the dead center of our reversal zone for equities which will last through Friday, and we are thus anticipating a high to be followed by a corrective dip. A good target for the high would be around 26,200 in the DOW and 2,800 in the S&P 500. We may consider selling short if these targets are reached before the end of the week. If we end up missing the top, however, we will simply wait for a corrective dip to buy, as long as that correction doesn't go too low. Good buy spots for a dip would be around 24,000 in the DOW (yes, that far down - that is why we are considering a short sell at the top) and 2,550 in the S&P 500. After any corrective dip we are still expecting this market to be bullish for at least a few more months. On the sidelines of the broad stock market for now.
Gold and silver prices both shot up today with gold rising $18 as it made a new monthly high at $1343. Silver's rise was also substantial, but it was not able to exceed last week's high of $16.18. We thus have a case of intermarket bearish divergence unless silver breaks that high over the next few days (it is close). We are now in a reversal zone specifically for precious metals that ends on Thursday. If silver cannot break above $16.18 over the next two days, I will consider selling short. Otherwise, we will wait for a final corrective drop (which is imminent) to the bottoms of the current medium-term cycles in both metals to buy. Still on the sidelines of gold and silver.
It still looks like crude oil started a new medium-term cycle on Dec. 24 at $42.67 (March contract chart) and maybe even a new longer-term (3 year) cycle. This means crude could be very bullish for the rest of the year. We have been waiting for a sharp sub-cycle correction and a good spot to buy. Prices have been rising into the current reversal zone for the broad stock market (which ends this Friday). This reversal zone could also influence crude so we may see a high and a corrective drop start this week or next. We are still looking to buy around $50. If prices edge higher after this week, we may have to wait until the first or second week of March to see a top as that is the next reversal zone specifically for crude oil (March 5 - 14). On the sidelines of crude for now but looking to go long soon.
The DOW, S&P 500, and NASDAQ (Nasdaq Composite) are all starting the trading week with new weekly highs so we are not going to get a bearish divergence signal this week. (The March contract chart for the NASDAQ 100 Index, however, did not make a new high today. We may consider this a bearish divergence signal if it stays below last week's high for the rest of the week.) Today is the dead center of our reversal zone for equities which will last through Friday, and we are thus anticipating a high to be followed by a corrective dip. A good target for the high would be around 26,200 in the DOW and 2,800 in the S&P 500. We may consider selling short if these targets are reached before the end of the week. If we end up missing the top, however, we will simply wait for a corrective dip to buy, as long as that correction doesn't go too low. Good buy spots for a dip would be around 24,000 in the DOW (yes, that far down - that is why we are considering a short sell at the top) and 2,550 in the S&P 500. After any corrective dip we are still expecting this market to be bullish for at least a few more months. On the sidelines of the broad stock market for now.
Gold and silver prices both shot up today with gold rising $18 as it made a new monthly high at $1343. Silver's rise was also substantial, but it was not able to exceed last week's high of $16.18. We thus have a case of intermarket bearish divergence unless silver breaks that high over the next few days (it is close). We are now in a reversal zone specifically for precious metals that ends on Thursday. If silver cannot break above $16.18 over the next two days, I will consider selling short. Otherwise, we will wait for a final corrective drop (which is imminent) to the bottoms of the current medium-term cycles in both metals to buy. Still on the sidelines of gold and silver.
It still looks like crude oil started a new medium-term cycle on Dec. 24 at $42.67 (March contract chart) and maybe even a new longer-term (3 year) cycle. This means crude could be very bullish for the rest of the year. We have been waiting for a sharp sub-cycle correction and a good spot to buy. Prices have been rising into the current reversal zone for the broad stock market (which ends this Friday). This reversal zone could also influence crude so we may see a high and a corrective drop start this week or next. We are still looking to buy around $50. If prices edge higher after this week, we may have to wait until the first or second week of March to see a top as that is the next reversal zone specifically for crude oil (March 5 - 14). On the sidelines of crude for now but looking to go long soon.
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