UPDATES ON THE BROAD STOCK MARKET and PRECIOUS METALS (11:30 pm EDST)
We are now technically at the end of our strong reversal zone (Aug. 17 - 25) for the broad stock market (and others). It looks like the DOW and S&P 500 made significant lows last Thursday (near the center of the reversal zone), which could be the sub-cycle corrections we were anticipating. It is possible, however, to extend this reversal zone into next week, which would allow for another drop to a lower sub-cycle correction. The fact that the S&P 500 and NASDAQ are making new all-time highs this week without the DOW (strong bearish divergence signal) is making me think another drop could happen. The DOW making a new all-time high by Friday would negate this bearish signal. The NASDAQ also appears to be a young cycle that may have started either Jul 19 at 14,178 or Aug. 19 at 14,424. This means the NASDAQ could be quite bullish now and for many more weeks. Even if these indices fall to another low over the next several days, they could all still be bullish as long as their sub-cycle corrections don't go TOO low. I am going to stay on the sidelines for now with the idea that we will see more highs into September and possibly a final top to sell short then.
Tomorrow (Thursday) is the last day of our reversal zone for precious metals, although it could be extended into Friday. Gold prices have been falling from a high on Tuesday. This could easily be a sub-cycle correction in progress, and if it is, it could go lower (at least to $1750). Silver may have started a new medium-term cycle with its double-bottom low on Aug. 9 ($23.02) and Aug. 20 ($22.92). If so, prices could be very bullish now. There is also the possibility (still) that silver is completing an older cycle, and we could get one final drop to a new low as soon as this week. Because of the ambiguity in this market, we will remain on the sidelines of gold and silver for now.
We are now technically at the end of our strong reversal zone (Aug. 17 - 25) for the broad stock market (and others). It looks like the DOW and S&P 500 made significant lows last Thursday (near the center of the reversal zone), which could be the sub-cycle corrections we were anticipating. It is possible, however, to extend this reversal zone into next week, which would allow for another drop to a lower sub-cycle correction. The fact that the S&P 500 and NASDAQ are making new all-time highs this week without the DOW (strong bearish divergence signal) is making me think another drop could happen. The DOW making a new all-time high by Friday would negate this bearish signal. The NASDAQ also appears to be a young cycle that may have started either Jul 19 at 14,178 or Aug. 19 at 14,424. This means the NASDAQ could be quite bullish now and for many more weeks. Even if these indices fall to another low over the next several days, they could all still be bullish as long as their sub-cycle corrections don't go TOO low. I am going to stay on the sidelines for now with the idea that we will see more highs into September and possibly a final top to sell short then.
Tomorrow (Thursday) is the last day of our reversal zone for precious metals, although it could be extended into Friday. Gold prices have been falling from a high on Tuesday. This could easily be a sub-cycle correction in progress, and if it is, it could go lower (at least to $1750). Silver may have started a new medium-term cycle with its double-bottom low on Aug. 9 ($23.02) and Aug. 20 ($22.92). If so, prices could be very bullish now. There is also the possibility (still) that silver is completing an older cycle, and we could get one final drop to a new low as soon as this week. Because of the ambiguity in this market, we will remain on the sidelines of gold and silver for now.
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