MARKETS UPDATE (3:30 pm EST)
It is highly likely that we are seeing the bottom to the recent crash in gold and silver forming now. Over the last few days I am seeing the beginning signs of a change in momentum from bearish to bullish in both these precious metals, but the bullish signals are not yet strong enough to make me want to jump in. After briefly breaking below its crash low of $22 earlier this week, silver now seems to be holding just above that level (bullish behavior) while gold seems paused between $1350 and $1400. I am being cautious here because there is a possibility of both metals turning down again and forming new lows. The more likely scenario, however, is that we are seeing the bottom now and can expect a strong rally to begin shortly. We will therefore wait for that bullish momentum signal with the idea of going long in both metals as soon as it appears. Still standing aside gold and silver and waiting to go long.
Amazingly, the broad stock market continues to edge up higher with virtually no significant corrections. This market is very overbought right now, and there is also some resistance around the 15,500 level. Today the market rose to 15,542 intraday but then dropped and closed at 15,300 near the bottom of the day's range. This is bearish behavior and may be signaling the start of the correction we've been expecting. Because overall momentum is still very bullish in the broad stock market, any corrections now may be relatively small and we will probably want to buy them. Still on the sidelines here.
The recent rally in crude oil may be leveling off and, like the broad stock market, crude could be ready to take a correction. We are now entering a timing window where a reversal is likely in both these markets. We will continue to stand aside and wait to see how this correction unfolds. As long as short-term momentum remains bullish, we will probably be looking to buy. Out of this market for now.
It is highly likely that we are seeing the bottom to the recent crash in gold and silver forming now. Over the last few days I am seeing the beginning signs of a change in momentum from bearish to bullish in both these precious metals, but the bullish signals are not yet strong enough to make me want to jump in. After briefly breaking below its crash low of $22 earlier this week, silver now seems to be holding just above that level (bullish behavior) while gold seems paused between $1350 and $1400. I am being cautious here because there is a possibility of both metals turning down again and forming new lows. The more likely scenario, however, is that we are seeing the bottom now and can expect a strong rally to begin shortly. We will therefore wait for that bullish momentum signal with the idea of going long in both metals as soon as it appears. Still standing aside gold and silver and waiting to go long.
Amazingly, the broad stock market continues to edge up higher with virtually no significant corrections. This market is very overbought right now, and there is also some resistance around the 15,500 level. Today the market rose to 15,542 intraday but then dropped and closed at 15,300 near the bottom of the day's range. This is bearish behavior and may be signaling the start of the correction we've been expecting. Because overall momentum is still very bullish in the broad stock market, any corrections now may be relatively small and we will probably want to buy them. Still on the sidelines here.
The recent rally in crude oil may be leveling off and, like the broad stock market, crude could be ready to take a correction. We are now entering a timing window where a reversal is likely in both these markets. We will continue to stand aside and wait to see how this correction unfolds. As long as short-term momentum remains bullish, we will probably be looking to buy. Out of this market for now.
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