MARKETS UPDATE (7:30 pm EDST)
The broad stock market seems reluctant to rally (so far) this week. All three indices (DOW, S&P 500, NASDAQ) made new highs on Monday, but then edged down on Tuesday and today (Wednesday). We exit our reversal zone (July 10-17) tomorrow but enter a new stronger one on Friday (July 19-30). If markets continue to fall into next week, we will look for a low to buy. But if they rally to new highs (especially with intermarket bearish divergence - one or two, but not all three, indices making new highs - then we will consider selling short for a brief, but likely sharp, correction down. Currently out of this market.
Silver appears to be in a "break out" mode now as prices are shooting above the late June highs (around $15.50) in a new medium-term cycle that started with the May 28 low of $14.30. This means the new cycle is bullish and we want to buy any significant corrections. We were anticipating one this week, but it looks like that's not happening. Instead, we may get a top into next week's general reversal zone (July 19-30) and then a corrective fall from that top. This could be a very strong set-up for a correction as gold's current rally is not nearly as strong as silver's, and as silver breaks above its June highs, gold is far below its late June highs (bearish divergence). We are now on the sidelines of both metals but are looking to buy again soon.
In Sunday's blog on crude oil I wrote:
"A top may happen early this week...any top followed by a corrective dip down to the $55 - $56 area could be a good place to buy now as this market still looks bullish into the summer."
Well, it looks like the top happened last Friday when prices hit $60.74 (Aug. contract chart) and they have now fallen to $56.21. We enter the new reversal zone this Friday (July 19-30), and it is especially relevant to crude. Let's now be alert for a buy spot in our target range ($55 - $56) in this upcoming reversal period. On the sidelines of crude for now.
The broad stock market seems reluctant to rally (so far) this week. All three indices (DOW, S&P 500, NASDAQ) made new highs on Monday, but then edged down on Tuesday and today (Wednesday). We exit our reversal zone (July 10-17) tomorrow but enter a new stronger one on Friday (July 19-30). If markets continue to fall into next week, we will look for a low to buy. But if they rally to new highs (especially with intermarket bearish divergence - one or two, but not all three, indices making new highs - then we will consider selling short for a brief, but likely sharp, correction down. Currently out of this market.
Silver appears to be in a "break out" mode now as prices are shooting above the late June highs (around $15.50) in a new medium-term cycle that started with the May 28 low of $14.30. This means the new cycle is bullish and we want to buy any significant corrections. We were anticipating one this week, but it looks like that's not happening. Instead, we may get a top into next week's general reversal zone (July 19-30) and then a corrective fall from that top. This could be a very strong set-up for a correction as gold's current rally is not nearly as strong as silver's, and as silver breaks above its June highs, gold is far below its late June highs (bearish divergence). We are now on the sidelines of both metals but are looking to buy again soon.
In Sunday's blog on crude oil I wrote:
"A top may happen early this week...any top followed by a corrective dip down to the $55 - $56 area could be a good place to buy now as this market still looks bullish into the summer."
Well, it looks like the top happened last Friday when prices hit $60.74 (Aug. contract chart) and they have now fallen to $56.21. We enter the new reversal zone this Friday (July 19-30), and it is especially relevant to crude. Let's now be alert for a buy spot in our target range ($55 - $56) in this upcoming reversal period. On the sidelines of crude for now.
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