MARKETS UPDATE (11:30 pm EDT)
Today we hit the center of our strong general reversal zone (May 16 - 26), and all three of our broad stock market indices (DOW, S&P 500, NASDAQ) took a steep dive (esp. the DOW). Our anticipated sub-cycle corrective drop may be starting. We expect a 3 - 8 day correction down to at least test the 15-day or 45-day moving averages. If support is found there, we may be looking to go long for another rally, but for now, we remain on the sidelines.
Both gold and silver pushed higher today. Silver is testing its April 25 high ($33.66). If it can exceed that over the next few days with gold staying below its April 22 all-time high ($3496) or even its May 7 high ($3432), we will have a strong intermarket bearish divergence signal inside our reversal zone and a good place for a top and a significant correction down. We will watch for that now. I am holding my short position in gold as a correction seems imminent. I am still on the sidelines of silver.
Crude oil seems to have made a top today as it tested resistance around $64 (July contract chart) before falling back and closing at $61.57. Because we are at the dead center of our reversal zone, it seems likely a correction has begun and prices will go lower. The depth of any sub-cycle correction now will make more clear the labeling of the current medium-term cycle. A "triple-bottom" formation near $56 would be a bullish sign that a new medium-term and longer-term cycle has started. I am currently on the sidelines of crude.
Today we hit the center of our strong general reversal zone (May 16 - 26), and all three of our broad stock market indices (DOW, S&P 500, NASDAQ) took a steep dive (esp. the DOW). Our anticipated sub-cycle corrective drop may be starting. We expect a 3 - 8 day correction down to at least test the 15-day or 45-day moving averages. If support is found there, we may be looking to go long for another rally, but for now, we remain on the sidelines.
Both gold and silver pushed higher today. Silver is testing its April 25 high ($33.66). If it can exceed that over the next few days with gold staying below its April 22 all-time high ($3496) or even its May 7 high ($3432), we will have a strong intermarket bearish divergence signal inside our reversal zone and a good place for a top and a significant correction down. We will watch for that now. I am holding my short position in gold as a correction seems imminent. I am still on the sidelines of silver.
Crude oil seems to have made a top today as it tested resistance around $64 (July contract chart) before falling back and closing at $61.57. Because we are at the dead center of our reversal zone, it seems likely a correction has begun and prices will go lower. The depth of any sub-cycle correction now will make more clear the labeling of the current medium-term cycle. A "triple-bottom" formation near $56 would be a bullish sign that a new medium-term and longer-term cycle has started. I am currently on the sidelines of crude.
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