The broad stock market is falling (so far) this week, and I am waiting to see if the DOW will find support at or above last week's low in the 16,000 area, as this could be a good spot to go long. Directional momentum is still mixed bullish and bearish in the DOW but it is 100% bullish in the S&P 500 and NASDAQ charts. Short-term trade signals are somewhat mixed at the moment. On the sidelines here.
Crude oil prices today dropped dramatically down to the $98 area that I had hoped to see, but the steep fall in crude over the last three days has triggered a strong bearish momentum signal, and this market now has a mixed bullish and bearish directional trend. If prices bottom soon and remain above the $97 area I may still go long, however, this change in momentum may put a damper on the rally that would follow. Should prices break clearly below $97 we may have to switch to bearish trading strategies (i.e. selling short any rallies). This market is extremely volatile right now due to the Ukraine crisis so trading must be done with caution.
The precious metals market is giving mixed signals now that also warns us to be cautious in trading. Gold may be bypassing a cycle correction that would normally take prices down to the $1280 level. Its surge up today to $1370 could be the start of a breakout and a strong rally. What bothers me here is the strong bearish momentum signals that have appeared this week in silver charts. If those signals are negated soon, it may be time to go long in both gold and silver, but until then I am remaining cautious. Staying on the sidelines for today.
The U.S. Dollar Index seems to be finding at least temporary support at 79.5. A bounce from this level could still push gold and silver prices back down short-term. On the other hand, if the dollar breaks below this support it would likely drive precious metal prices higher. Directional momentum in the dollar remains strongly bearish, so any rally (bounce) now is likely to be weak and brief.