UPDATES ON THE BROAD STOCK MARKET and PRECIOUS METALS (11:30 pm EST)
All three of our broad stock market indices (DOW, S&P 500, NASDAQ) started new medium-term cycles on Jan. 13, and they are all currently taking their first significant sub-cycle corrections. That said, we note that the NASDAQ's cycle is looking bearish, while the S&P 500's cycle looks bullish. The DOW is somewhat in between.
The peak of the NASDAQ's first sub-cycle came early (Jan. 24) and it was notably not a new all-time high (bearish sign). The subsequent corrective drop nearly touched the start of the cycle (Jan. 13 low) yesterday. We are in the center of a general reversal zone, so that might be the sub-cycle bottom; however, we enter another, stronger, general reversal zone next week (March 3 - 18), so this index could push lower. If it breaks below that Jan. 13 low (18,831), the cycle trend will officially turn bearish and be pointed down for many more weeks.
In contrast to the NASDAQ, the S&P 500 made its first sub-cycle high quite late (Feb. 19), and it was an ALL-TIME high (bearish divergence to the NASDAQ and DOW). It has corrected down from that high, and it made an isolated low yesterday well above the Jan. 13 start of its cycle just below its 15-day and 45-day moving averages. There is a strong support line at 5,900 (which was almost touched yesterday). If this index turns up now and makes another all-time high, the trend will be officially bullish.
The DOW's first sub-cycle high was on Jan. 31, like the NASDAQ, it was not a new all-time high. It has corrected down about halfway, and it could either go back up for another high or continue down to a lower low.
Clearly, we have mixed signals in this market right now. Will the S&P 500 lift the other indices into a bullish trend or will the NASDAQ pull them down into a sell-off? I am staying on the sidelines until the directional momentum in this market is clear.
It is very late in gold's current medium-term cycle. This cycle has been very bullish, but a final top to the cycle is now due, and it could happen anytime over the next two weeks. (It may have already happened with Monday's all-time high at $2958.) Once the top is in, we expect a sharp 2 - 5 week decline to the final cycle bottom. The decline may be even longer (and stronger) than normal as we are also expecting the bottom to a longer-term 2.5 year cycle soon. Our trading strategy now is to wait for the bottom of this correction to buy. With the ongoing Trump tariffs and an expected audit of Fort Knox by his administration, we expect gold prices to continue to be bullish into the end of this year (especially if any audit reveals a gold deficit.) I am currently on the sidelines of gold.
Silver's medium-term cycle is younger than gold's, and it is too early for the current corrective drop from the Feb. 14 high at $33.34 to be approaching a final cycle bottom. But we ARE in a time frame for a sub-cycle bottom. Tuesday's low at $31.35 may have been it, but if gold's potentially imminent correction pans out, both metals could fall significantly. Although I am tempted to buy silver now, I am going to wait until its low corresponds to a more significant low in gold. I am staying on the sidelines of silver for now.
All three of our broad stock market indices (DOW, S&P 500, NASDAQ) started new medium-term cycles on Jan. 13, and they are all currently taking their first significant sub-cycle corrections. That said, we note that the NASDAQ's cycle is looking bearish, while the S&P 500's cycle looks bullish. The DOW is somewhat in between.
The peak of the NASDAQ's first sub-cycle came early (Jan. 24) and it was notably not a new all-time high (bearish sign). The subsequent corrective drop nearly touched the start of the cycle (Jan. 13 low) yesterday. We are in the center of a general reversal zone, so that might be the sub-cycle bottom; however, we enter another, stronger, general reversal zone next week (March 3 - 18), so this index could push lower. If it breaks below that Jan. 13 low (18,831), the cycle trend will officially turn bearish and be pointed down for many more weeks.
In contrast to the NASDAQ, the S&P 500 made its first sub-cycle high quite late (Feb. 19), and it was an ALL-TIME high (bearish divergence to the NASDAQ and DOW). It has corrected down from that high, and it made an isolated low yesterday well above the Jan. 13 start of its cycle just below its 15-day and 45-day moving averages. There is a strong support line at 5,900 (which was almost touched yesterday). If this index turns up now and makes another all-time high, the trend will be officially bullish.
The DOW's first sub-cycle high was on Jan. 31, like the NASDAQ, it was not a new all-time high. It has corrected down about halfway, and it could either go back up for another high or continue down to a lower low.
Clearly, we have mixed signals in this market right now. Will the S&P 500 lift the other indices into a bullish trend or will the NASDAQ pull them down into a sell-off? I am staying on the sidelines until the directional momentum in this market is clear.
It is very late in gold's current medium-term cycle. This cycle has been very bullish, but a final top to the cycle is now due, and it could happen anytime over the next two weeks. (It may have already happened with Monday's all-time high at $2958.) Once the top is in, we expect a sharp 2 - 5 week decline to the final cycle bottom. The decline may be even longer (and stronger) than normal as we are also expecting the bottom to a longer-term 2.5 year cycle soon. Our trading strategy now is to wait for the bottom of this correction to buy. With the ongoing Trump tariffs and an expected audit of Fort Knox by his administration, we expect gold prices to continue to be bullish into the end of this year (especially if any audit reveals a gold deficit.) I am currently on the sidelines of gold.
Silver's medium-term cycle is younger than gold's, and it is too early for the current corrective drop from the Feb. 14 high at $33.34 to be approaching a final cycle bottom. But we ARE in a time frame for a sub-cycle bottom. Tuesday's low at $31.35 may have been it, but if gold's potentially imminent correction pans out, both metals could fall significantly. Although I am tempted to buy silver now, I am going to wait until its low corresponds to a more significant low in gold. I am staying on the sidelines of silver for now.
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