MARKETS UPDATE (3:30 pm EST)
After falling last week, gold and silver prices have been edging higher this week, but many short-term technical signals are still pointing to a deeper correction in these metals. This market is very volatile now so seesawing price movements can be expected. That said, we don't want to see gold prices break and close above the recent (Feb. 11) high of $1263. That was (is) our stop loss for our short position in gold. I am still looking for gold to fall towards $1170 and for silver to get to $14.50. Holding my short position in gold but out of silver.
The broad stock market has also been "seesawing" this week. Equities were down on Monday but rallied strongly yesterday and have been relatively flat (so far) today. This market could start turning down any time this month, but the current rally still appears to have some steam. (Directional momentum in the DOW, S&P 500 and NASDAQ has recently switched from 100% bearish to mixed bullish and bearish.) Next Monday may be a major turning point so lets see how far this rally can go before then. Still on the sidelines.
Crude oil prices continue to edge higher this week, and yesterday directional momentum in crude charts changed from 100% bearish to mixed bullish and bearish (they had been 100% bearish for the last five months). This is supporting the idea that a new cycle began with the recent low of Feb. 11 at $28.74 (April contract) and that we are on target for a rally to $38 or higher. Holding my long position in crude.
In my blog on Feb. 18 I wrote :
"...the U.S. Dollar Index may be stabilizing and getting ready to mount another assault on the 100 mark and maybe even break above it..."
That appears to be happening as the U.S. Dollar Index has been plowing through heavy overhead resistance over the last two weeks and has nearly closed the gap of the dollar's steep fall from early February. If the dollar can push higher, it could force precious metal prices down, at least temporarily. March 16 may be a turning point for the dollar, however, so any top around that time could be followed by another significant correction. If investors start to feel that the U.S. Federal Reserve is going to renege on its promise to continue raising interest rates then the U.S. dollar could start to break down again.
After falling last week, gold and silver prices have been edging higher this week, but many short-term technical signals are still pointing to a deeper correction in these metals. This market is very volatile now so seesawing price movements can be expected. That said, we don't want to see gold prices break and close above the recent (Feb. 11) high of $1263. That was (is) our stop loss for our short position in gold. I am still looking for gold to fall towards $1170 and for silver to get to $14.50. Holding my short position in gold but out of silver.
The broad stock market has also been "seesawing" this week. Equities were down on Monday but rallied strongly yesterday and have been relatively flat (so far) today. This market could start turning down any time this month, but the current rally still appears to have some steam. (Directional momentum in the DOW, S&P 500 and NASDAQ has recently switched from 100% bearish to mixed bullish and bearish.) Next Monday may be a major turning point so lets see how far this rally can go before then. Still on the sidelines.
Crude oil prices continue to edge higher this week, and yesterday directional momentum in crude charts changed from 100% bearish to mixed bullish and bearish (they had been 100% bearish for the last five months). This is supporting the idea that a new cycle began with the recent low of Feb. 11 at $28.74 (April contract) and that we are on target for a rally to $38 or higher. Holding my long position in crude.
In my blog on Feb. 18 I wrote :
"...the U.S. Dollar Index may be stabilizing and getting ready to mount another assault on the 100 mark and maybe even break above it..."
That appears to be happening as the U.S. Dollar Index has been plowing through heavy overhead resistance over the last two weeks and has nearly closed the gap of the dollar's steep fall from early February. If the dollar can push higher, it could force precious metal prices down, at least temporarily. March 16 may be a turning point for the dollar, however, so any top around that time could be followed by another significant correction. If investors start to feel that the U.S. Federal Reserve is going to renege on its promise to continue raising interest rates then the U.S. dollar could start to break down again.
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