MARKETS UPDATE (5:00 pm EDST)
After a small rally yesterday and a brief surge up early this morning, equity markets took a sharp plunge today with the DOW losing 343 points. Unless this market pushes higher into the end of the week or next week, there is a good possibility we are already seeing a corrective move down to the final medium-term cycle bottom for this market. If so, we could hit that bottom as early as next week. If this market is to remain bullish, that correction should end up in the 26,000 - 26,500 area in the DOW. But if the market is going to turn bearish now (a strong possibility), prices could end up considerably lower by the end of the year (or early next year). It is too early to label this a bullish or bearish market, but today's directional momentum turned from 100% bullish to mixed bullish and bearish which is not a good sign for bulls.
Unfortunately, the fate of the broad stock market is now being strongly influenced by political and geopolitical news. Although Democrats in this country have correctly pointed to the "loose-lipped" nature of President Trump and his tweeting habit as a destabilizing influence on equity markets, that party's recent official announcement to impeach Mr. Trump may ultimately turn out to be the pin that collapses the current stock market bubble. Wall Street will panic no matter which party is supplying the chaos. We will stay on the sidelines of the broad stock market for now.
We were stopped out of our long position in gold yesterday as both gold and silver broke lower to seek their final medium-term cycle bottoms. We are now in a new reversal zone for the precious metals Oct. 1 - 11. We should be watching for the final cycle bottoms to buy in both metals within this time frame. Gold could get to the low $1400's quickly and silver below $17. On the sidelines of gold and silver for now.
As with the broad stock market, directional momentum in crude oil today changed from 100% bullish to mixed bullish and bearish as prices edged even lower to $53.05 (Nov. contract chart). A break below $51 would officially turn this market bearish. Let's see how low prices go as we approach our next general reversal zone (Oct. 4 - 16) as that is a good time frame for the final cycle bottom of our current medium-term cycle to happen. On the sidelines crude oil for now.
After a small rally yesterday and a brief surge up early this morning, equity markets took a sharp plunge today with the DOW losing 343 points. Unless this market pushes higher into the end of the week or next week, there is a good possibility we are already seeing a corrective move down to the final medium-term cycle bottom for this market. If so, we could hit that bottom as early as next week. If this market is to remain bullish, that correction should end up in the 26,000 - 26,500 area in the DOW. But if the market is going to turn bearish now (a strong possibility), prices could end up considerably lower by the end of the year (or early next year). It is too early to label this a bullish or bearish market, but today's directional momentum turned from 100% bullish to mixed bullish and bearish which is not a good sign for bulls.
Unfortunately, the fate of the broad stock market is now being strongly influenced by political and geopolitical news. Although Democrats in this country have correctly pointed to the "loose-lipped" nature of President Trump and his tweeting habit as a destabilizing influence on equity markets, that party's recent official announcement to impeach Mr. Trump may ultimately turn out to be the pin that collapses the current stock market bubble. Wall Street will panic no matter which party is supplying the chaos. We will stay on the sidelines of the broad stock market for now.
We were stopped out of our long position in gold yesterday as both gold and silver broke lower to seek their final medium-term cycle bottoms. We are now in a new reversal zone for the precious metals Oct. 1 - 11. We should be watching for the final cycle bottoms to buy in both metals within this time frame. Gold could get to the low $1400's quickly and silver below $17. On the sidelines of gold and silver for now.
As with the broad stock market, directional momentum in crude oil today changed from 100% bullish to mixed bullish and bearish as prices edged even lower to $53.05 (Nov. contract chart). A break below $51 would officially turn this market bearish. Let's see how low prices go as we approach our next general reversal zone (Oct. 4 - 16) as that is a good time frame for the final cycle bottom of our current medium-term cycle to happen. On the sidelines crude oil for now.
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