CRUDE OIL and GOLD TRADE ALERTS (2:00 PM EST)
Crude oil prices opened this morning (in the U.S. market) slightly below $28 which was below our stop loss at $28.30. Most traders should have been stopped out with a small loss. Any traders still in should get out before today's market close. In Monday's blog on crude I wrote that:
"...there is a possibility of prices dropping lower into the first or second week of February which is another reversal zone and is the deadline for a normal cycle bottom in crude. So this cycle's bottom could be forming now or will form then."
It is looking more like that bottom could form in February as prices are dropping lower today. The final bottom to this current cycle could be around $25, but we are getting close to that level now so it may even go lower. The recent lifting of sanctions in Iran and the prospect of oil from that country flooding an already oversupplied market is one reason crude prices are continuing their downward trek. A bottom and reversal is still possible this week or early next so we will watch this carefully. If that doesn't happen we will look for the final bottom in the first two weeks of February. We were stopped out of our long position in crude and are out of this market for now.
Gold prices today are surging up to a resistance area at the recent highs we saw earlier in the month in the $1100 - $1110 area, and there are some short-term bearish signals now suggesting a pause or correction in this rally. For this reason I am going to take profits and sell my long position in gold today. These profits should make up for any losses we took from our brief trade in crude. We could still see prices rise into our target area of $1120 - $1150, but we need to keep in mind that the overall trend right now in precious metals is still bearish so we could see this new gold cycle peak early and start to fall to new lows over the next several months. If we get a small correction now, we may go long again for a continued rally into early February to that target area. Taking profits and selling my long position in gold today.
Silver's rally has not been as strong as gold's, and this is one reason to be cautious about any precious metal rally right now. It is unclear whether or not silver has started its new medium-term cycle yet (unlike gold which likely began its new cycle on Dec.2) so silver could still crash through its early December low over the next three or four weeks and make a cycle bottom. We will continue to stay on the sidelines of silver until the cycle pattern is more clearly defined.
I will post some comments on the broad stock market later today. We are still on the sidelines of this market.
Crude oil prices opened this morning (in the U.S. market) slightly below $28 which was below our stop loss at $28.30. Most traders should have been stopped out with a small loss. Any traders still in should get out before today's market close. In Monday's blog on crude I wrote that:
"...there is a possibility of prices dropping lower into the first or second week of February which is another reversal zone and is the deadline for a normal cycle bottom in crude. So this cycle's bottom could be forming now or will form then."
It is looking more like that bottom could form in February as prices are dropping lower today. The final bottom to this current cycle could be around $25, but we are getting close to that level now so it may even go lower. The recent lifting of sanctions in Iran and the prospect of oil from that country flooding an already oversupplied market is one reason crude prices are continuing their downward trek. A bottom and reversal is still possible this week or early next so we will watch this carefully. If that doesn't happen we will look for the final bottom in the first two weeks of February. We were stopped out of our long position in crude and are out of this market for now.
Gold prices today are surging up to a resistance area at the recent highs we saw earlier in the month in the $1100 - $1110 area, and there are some short-term bearish signals now suggesting a pause or correction in this rally. For this reason I am going to take profits and sell my long position in gold today. These profits should make up for any losses we took from our brief trade in crude. We could still see prices rise into our target area of $1120 - $1150, but we need to keep in mind that the overall trend right now in precious metals is still bearish so we could see this new gold cycle peak early and start to fall to new lows over the next several months. If we get a small correction now, we may go long again for a continued rally into early February to that target area. Taking profits and selling my long position in gold today.
Silver's rally has not been as strong as gold's, and this is one reason to be cautious about any precious metal rally right now. It is unclear whether or not silver has started its new medium-term cycle yet (unlike gold which likely began its new cycle on Dec.2) so silver could still crash through its early December low over the next three or four weeks and make a cycle bottom. We will continue to stay on the sidelines of silver until the cycle pattern is more clearly defined.
I will post some comments on the broad stock market later today. We are still on the sidelines of this market.
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