All three broad stock market indices (DOW, S&P 500 and NASDAQ) are now making new highs this week so our earlier intermarket bearish divergence signal has been negated. It appears that the Thanksgiving holiday (tomorrow) is giving its traditional lift to the markets. As I stated in Monday's blog, we will now watch for another bearish divergence signal in next week's reversal zone (Nov. 28 - Dec. 6). Still on the sidelines here.
Gold and silver prices continue to vacillate and remain indecisive in their short-term directional trend. Gold's close above $1290 last week was bullish, but Monday's plunge to $1274 was bearish. Today gold is closing back above $1290 again. The minutes of this month's Fed meeting were released today and seemed to affirm another interest rate hike in the near future, but the minutes also stated that the pace of a rate rise could be more moderate than expected. This dovish tone likely pushed the U.S. Dollar Index down and boosted the precious metals. My preference is still to see gold and silver fall into next week's reversal zone and make a final (older) cycle bottom to buy, but if prices rally from here, we may have to switch to the idea of new bullish cycles starting from the precious metal's Oct. 6 lows (see earlier blog discussions). On the sidelines of gold and silver.
Crude oil prices are rising and are now challenging their Nov. 8 high at $58.14 (Jan. 2018 contract chart). We are late in the medium-term cycle of crude so a top is due to be followed by a significant correction to the final cycle bottom soon. Today is the last day of a critical reversal zone for crude so I am tempted to sell short here; however, short-term technical signals are mostly bullish at the moment, and another reversal zone for crude begins next week (Nov. 28 - Dec. 6). I am going to wait and see if prices can push higher. There is a small chance that last week's low at $55 was the end of the medium-term cycle (and start of a new one), but this is considered unlikely as the correction from the Nov. 8 top was very brief and shallow. If prices really take off, however, we will have to consider that possibility. On the sidelines of crude.