MARKETS UPDATE (4:30 pm EDST)
Several markets are giving investors a wild ride today.
The broad stock market took another dive with the DOW losing a good chunk of its gains from last week's end of week surge. Is this just another dip in the roller coaster ride or will it continue down? The drop seems to be finding support at the "gap up" point from last Wednesday/Thursday so a bounce back up is certainly possible. We are now starting the first day of the new reversal zone (Sept.3 - 13) so there is plenty of time for a significant top or bottom to form this week or next. If equities do continue lower, we will watch to see if the DOW breaks its Aug. 15 low at 25,339. That would be a sign the market is turning bearish. On the sidelines here.
Perhaps in response to the equity plunge, gold and silver prices surged dramatically today. Gold got up to $1549 but was not able to break its recent Aug. 25 high of $1555. Silver prices, however, shot up to a new yearly high of $19.19. This gives us yet another bearish divergence signal (we had one last week) until gold can break through $1555. It is late in the medium-term cycles of both metals so we are still waiting for a top (due now) and correction down to the final cycle bottoms where we will look to buy. It would be ideal to see those bottoms in the next reversal zone for the precious metals coming up Sept. 13 - 27, but if this strong rally continues, we could end up seeing the top in that time period instead of the bottom (that would mean the cycles are expanding - a possibility). Either way, this market is looking very bullish now. On the sidelines of gold and silver for now.
Today crude oil made a double top to Friday's high at $57.13 before dropping down and closing the day at $53.95 (Oct. contract chart). This is bearish behavior, and indeed, directional momentum in this market today switched from mixed bullish and bearish to 100% bearish. This is suggesting that prices will fall below the Aug. 7 low of $52.17 and turn the current cycle bearish. Let's wait to see if that happens. I am especially concerned here because crude often parallels the broad stock market so this may be a bearish sign for equities as well. We are on the sidelines of crude.
Several markets are giving investors a wild ride today.
The broad stock market took another dive with the DOW losing a good chunk of its gains from last week's end of week surge. Is this just another dip in the roller coaster ride or will it continue down? The drop seems to be finding support at the "gap up" point from last Wednesday/Thursday so a bounce back up is certainly possible. We are now starting the first day of the new reversal zone (Sept.3 - 13) so there is plenty of time for a significant top or bottom to form this week or next. If equities do continue lower, we will watch to see if the DOW breaks its Aug. 15 low at 25,339. That would be a sign the market is turning bearish. On the sidelines here.
Perhaps in response to the equity plunge, gold and silver prices surged dramatically today. Gold got up to $1549 but was not able to break its recent Aug. 25 high of $1555. Silver prices, however, shot up to a new yearly high of $19.19. This gives us yet another bearish divergence signal (we had one last week) until gold can break through $1555. It is late in the medium-term cycles of both metals so we are still waiting for a top (due now) and correction down to the final cycle bottoms where we will look to buy. It would be ideal to see those bottoms in the next reversal zone for the precious metals coming up Sept. 13 - 27, but if this strong rally continues, we could end up seeing the top in that time period instead of the bottom (that would mean the cycles are expanding - a possibility). Either way, this market is looking very bullish now. On the sidelines of gold and silver for now.
Today crude oil made a double top to Friday's high at $57.13 before dropping down and closing the day at $53.95 (Oct. contract chart). This is bearish behavior, and indeed, directional momentum in this market today switched from mixed bullish and bearish to 100% bearish. This is suggesting that prices will fall below the Aug. 7 low of $52.17 and turn the current cycle bearish. Let's wait to see if that happens. I am especially concerned here because crude often parallels the broad stock market so this may be a bearish sign for equities as well. We are on the sidelines of crude.
RSS Feed