MARKETS UPDATE (11:45 pm EST)
The minutes of this months FOMC meeting released this afternoon basically reiterated the Fed's recent policy of remaining patient and watching the economic data to determine when to raise interest rates. This came as no surprise to most analysts, but nervous investors concerned about an unstable European economy and a further drop in oil prices (and perhaps hoping for signs of a rate hike delay) seemed disappointed and the DOW dropped 195 points. The DOW closed at 17,191 which is below important support at 17,200, and it is also making a new low for the month. However, the S&P 500 and NASDAQ are not making new monthly lows (yet) so this could be a case of bullish intermarket divergence, especially if it can be maintained into next week. This market could go either way right now and how it moves into next week's reversal zone is important. I would still like to see it rise into that time frame for a good spot to sell short, but if the DOW continues down now and breaks clearly below the !7,000 area, the broad stock market could be in trouble. Directional momentum remains mixed bullish and bearish in the DOW, S&P 500 and NASDAQ. Still on the sidelines.
Gold and silver prices dropped sharply on Monday but have been stable Tuesday and today. Short-term indicators are suggesting more downside, and ideally gold will move closer to the $1250 area (and silver closer to $17) by next week which would be an ideal setup to buy. On the sidelines and waiting to buy.
The U.S. Dollar Index continues to be buoyed up by the plunging euro (which has taken a one-two punch this month, first from Switzerland's decision to de-peg the Swiss franc from the euro, and second from the ECB's announcement last week of a massive QE package to "rescue" the European economy). More dollar rallying could help push precious metal prices into our target areas, but the dollar is also extremely overbought and a correction may be imminent. We may have an unusual set of circumstances now where we will see the dollar and gold prices rising together as both could be seen as safe haven investments in an unstable global economy.
Crude oil prices have now dipped below the Jan.13th low of $44.78 which means the cycle bottom is still forming. Any new low into next week that holds above $40 could be an ideal entry point to buy for a possible rally to $60 (or higher). Still on the sidelines.
The minutes of this months FOMC meeting released this afternoon basically reiterated the Fed's recent policy of remaining patient and watching the economic data to determine when to raise interest rates. This came as no surprise to most analysts, but nervous investors concerned about an unstable European economy and a further drop in oil prices (and perhaps hoping for signs of a rate hike delay) seemed disappointed and the DOW dropped 195 points. The DOW closed at 17,191 which is below important support at 17,200, and it is also making a new low for the month. However, the S&P 500 and NASDAQ are not making new monthly lows (yet) so this could be a case of bullish intermarket divergence, especially if it can be maintained into next week. This market could go either way right now and how it moves into next week's reversal zone is important. I would still like to see it rise into that time frame for a good spot to sell short, but if the DOW continues down now and breaks clearly below the !7,000 area, the broad stock market could be in trouble. Directional momentum remains mixed bullish and bearish in the DOW, S&P 500 and NASDAQ. Still on the sidelines.
Gold and silver prices dropped sharply on Monday but have been stable Tuesday and today. Short-term indicators are suggesting more downside, and ideally gold will move closer to the $1250 area (and silver closer to $17) by next week which would be an ideal setup to buy. On the sidelines and waiting to buy.
The U.S. Dollar Index continues to be buoyed up by the plunging euro (which has taken a one-two punch this month, first from Switzerland's decision to de-peg the Swiss franc from the euro, and second from the ECB's announcement last week of a massive QE package to "rescue" the European economy). More dollar rallying could help push precious metal prices into our target areas, but the dollar is also extremely overbought and a correction may be imminent. We may have an unusual set of circumstances now where we will see the dollar and gold prices rising together as both could be seen as safe haven investments in an unstable global economy.
Crude oil prices have now dipped below the Jan.13th low of $44.78 which means the cycle bottom is still forming. Any new low into next week that holds above $40 could be an ideal entry point to buy for a possible rally to $60 (or higher). Still on the sidelines.
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