UPDATES ON THE BROAD STOCK MARKET, GOLD, and SILVER (11:30 pm EDT)
As I stated in yesterday's blog, the broad stock market's trend now seems to be at least temporarily bullish. This is most likely the result of the Fed's generous interest rate cut given out following this month's FOMC meeting. It also appears that we are completing a 6-year cycle rather than a 4-year cycle in equity markets, and that means our three market indices (DOW, S&P 500, NASDAQ) could push higher into next year before taking a substantial longer-term correction of at least 16% - 26%. Because our current medium-term cycles in these indices are bullish, we may be looking to buy any short-term substantial sub-cycle dips. For now, we remain on the sidelines of the broad stock market.
It is very late in the current medium-term cycle of gold, and today gold made a new all-time high at $2689. There is a potential "pivot point" for gold (and silver) through Thursday, so a final top in the current cycle could be imminent. As I've mentioned in previous blogs, this could also be the final top in a longer-term (50 week) cycle, and if so, a very steep corrective decline could follow. It's also possible another medium-term cycle could follow the current one before we make a 50 week cycle bottom. Either way, a significant top in the current medium-term cycle is due anytime now. If today wasn't it and we don't see it this week, there is another potentially strong "pivot point" for gold next Monday. If we see just a medium-term cycle bottom, prices might only get to the $2550 area, but a 50 week cycle bottom might get as low as $2400. Considering the possibility of a 50 week cycle low, it may be worth short-selling gold if we see strong technical signs of a top this week or early next week. For now I am remaining on the sidelines.
We bailed out of our short position in silver last week. That was a good move as silver prices skyrocketed today and closed just above $32 and also above the previous high from July 11. This confirms our suspicion that silver started a new medium-term cycle on Aug. 8. This means the current medium-term cycle is relatively young and has time to rally some more before topping out. The new cycle also looks bullish as prices are breaking well above a downward sloping trend-line that had been in place since May.
Silver prices are now getting close to the $32.38 high of May 21. If they exceed that, we will have a new high for the longer-term 4.3 year cycle. The top to that cycle is now overdue. Whether the 4.3 year cycle top happened on May 21 or will happen now, we expect a correction down from that top of at least 21%, so we would still like to sell silver short near that top. That top may be difficult to call; however, there's a good chance it will coincide with the top to the current medium-term cycle. I should also note that there is a remote possibility (i.e.unlikely) that the 4.3 year cycle already bottomed with the Aug. 8 low at $26.52. If that's the case, silver prices could be VERY bullish from here.
Yes, I know this is all very confusing and ambiguous right now, and that's why we are on the sidelines. If we end up missing a short sell on the 4.3 year cycle correction, we will have another good buying opportunity at the final bottom of that cycle. We remain on the sidelines of silver for now.
As I stated in yesterday's blog, the broad stock market's trend now seems to be at least temporarily bullish. This is most likely the result of the Fed's generous interest rate cut given out following this month's FOMC meeting. It also appears that we are completing a 6-year cycle rather than a 4-year cycle in equity markets, and that means our three market indices (DOW, S&P 500, NASDAQ) could push higher into next year before taking a substantial longer-term correction of at least 16% - 26%. Because our current medium-term cycles in these indices are bullish, we may be looking to buy any short-term substantial sub-cycle dips. For now, we remain on the sidelines of the broad stock market.
It is very late in the current medium-term cycle of gold, and today gold made a new all-time high at $2689. There is a potential "pivot point" for gold (and silver) through Thursday, so a final top in the current cycle could be imminent. As I've mentioned in previous blogs, this could also be the final top in a longer-term (50 week) cycle, and if so, a very steep corrective decline could follow. It's also possible another medium-term cycle could follow the current one before we make a 50 week cycle bottom. Either way, a significant top in the current medium-term cycle is due anytime now. If today wasn't it and we don't see it this week, there is another potentially strong "pivot point" for gold next Monday. If we see just a medium-term cycle bottom, prices might only get to the $2550 area, but a 50 week cycle bottom might get as low as $2400. Considering the possibility of a 50 week cycle low, it may be worth short-selling gold if we see strong technical signs of a top this week or early next week. For now I am remaining on the sidelines.
We bailed out of our short position in silver last week. That was a good move as silver prices skyrocketed today and closed just above $32 and also above the previous high from July 11. This confirms our suspicion that silver started a new medium-term cycle on Aug. 8. This means the current medium-term cycle is relatively young and has time to rally some more before topping out. The new cycle also looks bullish as prices are breaking well above a downward sloping trend-line that had been in place since May.
Silver prices are now getting close to the $32.38 high of May 21. If they exceed that, we will have a new high for the longer-term 4.3 year cycle. The top to that cycle is now overdue. Whether the 4.3 year cycle top happened on May 21 or will happen now, we expect a correction down from that top of at least 21%, so we would still like to sell silver short near that top. That top may be difficult to call; however, there's a good chance it will coincide with the top to the current medium-term cycle. I should also note that there is a remote possibility (i.e.unlikely) that the 4.3 year cycle already bottomed with the Aug. 8 low at $26.52. If that's the case, silver prices could be VERY bullish from here.
Yes, I know this is all very confusing and ambiguous right now, and that's why we are on the sidelines. If we end up missing a short sell on the 4.3 year cycle correction, we will have another good buying opportunity at the final bottom of that cycle. We remain on the sidelines of silver for now.
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