The Alternative Investor
  • Home
  • TRADING BLOG
  • Current Positions
  • Alternative Investor Strategy
  • ETFs
  • About Alternative Investor
  • Contact

Trading Blog        Tuesday,  October 13 ,  2015

10/13/2015

 
IMPORTANT MARKETS UPDATE  (3:15 pm EDT)

Last week there were several technical signals suggesting that the broad stock market could be turning bullish. If this is happening it is possible that the August 24 market lows were a significant cycle bottom in all three major market indices (DOW, S&P 500, and NASDAQ) and that the correction of around 16% may be it for now (i.e. at least 6 more weeks). After examining the charts of these indices during the weekend, I am thinking this bullish view is highly probable. I am therefore abandoning the idea of these markets making new short-term lows (below their August lows). It appears the cycle structure of the broad stock market is shifting, and we need to shift our trading strategy as well. 

​Despite all of this, we are still at the center of a strong reversal period in many markets this week (it may extend into early next week), and the strong rally in equities from last week seems to be leveling off. There is therefore still a high probability of some sort of reversal now which we can use as an opportunity to take profits in our short broad stock market positions. If the cycles have turned bullish then a pullback in the DOW right now may only get to the 16,700 area before rallying again. We will watch for this to happen this week or possibly into next week. An equivalent pullback in the S&P 500 would be to the 1960 area.  Holding my short position in the broad stock market but looking to take profits soon.

We are now also at the center of a reversal period for gold and silver and prices in both metals are rising into it. Because silver exceeded its August high last week and gold didn't, we still have a strong case of intermarket bearish divergence. We are also seeing bearish divergence this week as yesterday silver exceeded its high from last week, but gold did not. All of this points to some kind of pullback now. If gold stays below its August 24 high ($1170.10) it suggests that the cycle trend is still bearish, and a major correction could be forthcoming. If prices break above $1170.10 this week or next, we could still see a reversal, but the correction would likely not be as severe. Either way, a price reversal seems imminent so I am holding on to my short gold position for now. Unlike gold, silver's trend seems to have turned bullish so it may be wise to wait for a correction in both metals and then look for an opportunity to buy.  Holding my gold short position and still out of silver.

Crude oil made a top last Friday at $50.92 and prices made a low of $46.80 intraday today. I had been expecting such a correction but from a higher price (closer to $55). The lower top, as well as last week's shift in directional momentum from bearish to mixed bullish and bearish suggests that prices could still go higher. If prices fall to the $44 - $45 area this week or next, I may consider buying for another rally to $55 or higher.  Out of crude oil for now.


​

Comments are closed.

    RSS Feed

    Archives

    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012

The Alternative Investor takes no advertising or incentives from any company, institution or investment that is discussed on the website.  Any trading and investing information presented is based on Alternative Investor's independent and unbiased research and analysis of current financial markets.

                                                                                                                                                            LEGAL and DISCLAIMER

All statements and trading/investment information on this website represent solely the personal opinion of The Alternative Investor based on information available at the time of writing and are intended for educational purposes only and are not a recommendation to buy or sell securities, commodities or currencies.  The Alternative Investor is not a licensed broker or financial advisor.  The Alternative Investor presents the trading and investing information on this site in good faith based on his own research into current financial markets but cannot and does not guarantee profit and does not guarantee against any financial losses that result from using this information.  All users of this website and the information presented within it assume full responsibility for their own personal trading/investing decisions and any losses that may result from them.

Trading and investing in any financial market may involve serious risk of loss.  For this reason all traders and investors should never place more money than they can afford to lose in any individual market.  The Alternative Investor monitors several markets and encourages a balanced distribution of funds among them (and others).  The Alternative Investor recommends consulting with a professional financial advisor before making any transactions with financial ramifications.  All trading, investing and financial transactions should always be made in accordance with the appropriate laws and legal regulations in your area of jurisdiction.

The Alternative Investor is an independent researcher and analyst and receives no compensation of any kind from any individuals, groups, companies or institutions discussed on this website.