MARKETS UPDATE (7:45 pm EST)
Not surprisingly, this year's broad stock market "Santa Claus" rally is continuing into the Christmas holiday with the DOW breaking and closing above 18,000 for the first time ever. The S&P 500 is also making new all-time highs this week; however, the NASDAQ is not making a new high and appears reluctant to break above 4800. If the NASDAQ continues to stay below its Nov. 28 high of 4811, we may have a case of intermarket bearish divergence in these indices which could mean another downturn is imminent. This could happen anytime between now and Jan 5. If the NASDAQ does make a new high, the picture is more bullish, but we could still get a small correction from a top that should happen within the next two weeks. Unless directional momentum in the broad stock market suddenly turns bearish, the bottom of any correction now should probably be bought. If these markets continue to rally strongly into Jan.5, we may also have a good opportunity to go short for a strong correction. Markets are thinly traded during extended holiday periods so it is probably best that we are still on the sidelines of the broad stock market for now.
Yesterday gold prices dropped close to the $1160 support level intraday but then snapped back and closed the day near (but under) $1180. While gold could be finding a bottom here, there is still a good chance of it dropping lower. As I stated in my last blog, any serious break below $1140 would be a bearish development, but any correction that holds above $1140-$1145 could be a good spot to go long again, especially if it happens around Jan. 2-5. On the sidelines of gold and silver.
The U.S. Dollar Index has been pushing against resistance at the 90 level over the last two days, and directional momentum is still strongly bullish in this index. If the dollar can break convincingly above this level, it would send gold and silver prices lower. On the other hand, the dollar is very overbought and overdue for a correction. If a corrective pattern unfolds now and the dollar moves down, it would lift precious metal prices higher. We will continue to watch this index carefully to help us gauge the movements of gold and silver.
The Dec.16 low in crude oil at $53.64 is holding as crude appears to be forming a base just above $55. Some sort of bottom should be in by Jan.5 ($53.64 may be it) so I am staying with my long position for now with a tight stop loss below $53.60. Holding my long position in crude oil.
I would like to wish a very MERRY CHRISTMAS to all the blog readers !
Not surprisingly, this year's broad stock market "Santa Claus" rally is continuing into the Christmas holiday with the DOW breaking and closing above 18,000 for the first time ever. The S&P 500 is also making new all-time highs this week; however, the NASDAQ is not making a new high and appears reluctant to break above 4800. If the NASDAQ continues to stay below its Nov. 28 high of 4811, we may have a case of intermarket bearish divergence in these indices which could mean another downturn is imminent. This could happen anytime between now and Jan 5. If the NASDAQ does make a new high, the picture is more bullish, but we could still get a small correction from a top that should happen within the next two weeks. Unless directional momentum in the broad stock market suddenly turns bearish, the bottom of any correction now should probably be bought. If these markets continue to rally strongly into Jan.5, we may also have a good opportunity to go short for a strong correction. Markets are thinly traded during extended holiday periods so it is probably best that we are still on the sidelines of the broad stock market for now.
Yesterday gold prices dropped close to the $1160 support level intraday but then snapped back and closed the day near (but under) $1180. While gold could be finding a bottom here, there is still a good chance of it dropping lower. As I stated in my last blog, any serious break below $1140 would be a bearish development, but any correction that holds above $1140-$1145 could be a good spot to go long again, especially if it happens around Jan. 2-5. On the sidelines of gold and silver.
The U.S. Dollar Index has been pushing against resistance at the 90 level over the last two days, and directional momentum is still strongly bullish in this index. If the dollar can break convincingly above this level, it would send gold and silver prices lower. On the other hand, the dollar is very overbought and overdue for a correction. If a corrective pattern unfolds now and the dollar moves down, it would lift precious metal prices higher. We will continue to watch this index carefully to help us gauge the movements of gold and silver.
The Dec.16 low in crude oil at $53.64 is holding as crude appears to be forming a base just above $55. Some sort of bottom should be in by Jan.5 ($53.64 may be it) so I am staying with my long position for now with a tight stop loss below $53.60. Holding my long position in crude oil.
I would like to wish a very MERRY CHRISTMAS to all the blog readers !
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