Today silver is giving us that bearish sell signal we had been anticipating, and we are going to establish a short position in silver now. As with gold, there is room for a good correction here; however, we will watch carefully for any support levels the falling price may find should the correction turn out to be minor.
Crude oil also flashed a bearish short-term sell signal today and is falling steeply. We are not, however, shorting this market right now because of a conflict between momentum indicators and cycle analysis. While momentum is strongly bearish at the moment, cycle studies point to the start of a significant new cycle and very strong support at the April 18th low around $86. If the cycle is valid, the current correction shouldn't get very far, and we should be looking to buy if it stalls and finds support above that $86 level. We, therefore, currently have a strong contradiction between momentum signals (bearish) and cycle analysis (bullish) and will wait for this situation to resolve before trading the market.