The broad stock market is rallying today and seems to be shrugging off (for now) any worries about "trade wars" with China. The DOW is still far from its all-time high of 26,617 so we still have strong bearish divergence against the S&P 500 and NASDAQ which made new all-time highs in August. Today the DOW is making a new monthly high while the S&P 500 and NASDAQ are not (the S&P 500 is close) which gives us more bearish divergence. We are only one day out of our reversal zone and our short DOW position is only about 1% in the red so I am going to hold this short position for at least another day as a top and correction could be imminent. Stay tuned as we may cover this short position over the next few days if we don't see more signs of a reversal. If we do cover, we will be looking to go short again in the next reversal zone coming up Sept. 28 - Oct. 8.
Gold and silver are rallying very weakly as we enter a new reversal zone for the precious metals (Sept. 18 - 27). If this rally doesn't pick up some momentum soon, we could easily see new lows into this new reversal period. That's not so bad if silver dips a bit below last week's low of $13.95 and gold remains above its Aug. 15 low of $1161 (in fact it would be an ideal set-up to buy). The danger here is the possibility of a stronger correction with gold breaking below $1161. Time is on our side as any low is likely due any time over the next seven trading days. I am holding my long positions in gold and silver for now. If silver does make a new low this week, we would like to see gold stay above $1180.
Our crude oil purchase at today's market open was a good buy spot as prices jumped up from yesterday's close before falling back a bit. This gave us an entry price close to our stop loss range of $70 - $71. It still looks like a significant top has formed around $70 so we are holding our short position in crude.