MARKETS UPDATE (7:15 pm EST)
The broad stock market is falling again this week towards that 15,800 support level in the DOW. If this level holds we could see more rallying into the holidays before any serious correction. If it breaks, the DOW could take a much deeper correction into the end of the year and may give us a good entry point to go long. Markets are likely nervous this week in anticipation of next week's Federal Reserve meeting when it is expected that the Fed will decide on when to begin tapering back its bond purchasing program (QE). Some analysts feel it will be delayed until early next year, but there is also some talk of a "mini-taper" to begin this month to try and slowly wean the investing community away from QE. The issue of QE tapering has now become a major "wild card" factor affecting all major markets and we need to watch it carefully. Still on the sidelines of the broad stock market.
As I mentioned in Monday's blog, gold and silver prices may fluctuate up and down over the next few weeks, but as long as gold stays under $1300 and silver stays under $21, our short positions are likely not in danger. Overall momentum remains strongly bearish in both metals as well as in the major precious metal mining company indices (HUI and XAU). Reaction to QE tapering policy could also affect this market over the next several weeks. If prices turn down into the holidays, we could see a long-term cycle bottom form in precious metals that would present the "golden" opportunity we have been waiting for to go long. On the other hand, if the current rally continues into next week, we may see a holiday top form and then a decline to the final cycle bottoms sometime early next year. We will have to wait and see how this plays out. Currently holding short positions in gold and silver.
It is looking like crude oil did start a new cycle with that low of 91.77 on Nov. 27, but the overall direction of this cycle is still not clear. Momentum signals are presently mixed bullish and bearish. The price needs to break above $100 now or there is a danger of the cycle becoming bearish again. Still out of this market until directional momentum is clear.
The broad stock market is falling again this week towards that 15,800 support level in the DOW. If this level holds we could see more rallying into the holidays before any serious correction. If it breaks, the DOW could take a much deeper correction into the end of the year and may give us a good entry point to go long. Markets are likely nervous this week in anticipation of next week's Federal Reserve meeting when it is expected that the Fed will decide on when to begin tapering back its bond purchasing program (QE). Some analysts feel it will be delayed until early next year, but there is also some talk of a "mini-taper" to begin this month to try and slowly wean the investing community away from QE. The issue of QE tapering has now become a major "wild card" factor affecting all major markets and we need to watch it carefully. Still on the sidelines of the broad stock market.
As I mentioned in Monday's blog, gold and silver prices may fluctuate up and down over the next few weeks, but as long as gold stays under $1300 and silver stays under $21, our short positions are likely not in danger. Overall momentum remains strongly bearish in both metals as well as in the major precious metal mining company indices (HUI and XAU). Reaction to QE tapering policy could also affect this market over the next several weeks. If prices turn down into the holidays, we could see a long-term cycle bottom form in precious metals that would present the "golden" opportunity we have been waiting for to go long. On the other hand, if the current rally continues into next week, we may see a holiday top form and then a decline to the final cycle bottoms sometime early next year. We will have to wait and see how this plays out. Currently holding short positions in gold and silver.
It is looking like crude oil did start a new cycle with that low of 91.77 on Nov. 27, but the overall direction of this cycle is still not clear. Momentum signals are presently mixed bullish and bearish. The price needs to break above $100 now or there is a danger of the cycle becoming bearish again. Still out of this market until directional momentum is clear.
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