No Crash Today, not even close.
My forecast on the crash, based on past history of the DJIA,
obviously needs some fine tuning. Will have to factor in
the NASDAQ, S&P 500, and Russel 2000. Obviously, I was wrong,
and perhaps clues to the next direction in the market will be
based on this Friday's employment report.
I had been expecting a lower stock market to lead to gains in
the precious metals. Perhaps I had it backwards. Maybe gains in
the metals will trigger a stock market decline. Monday's gains
in silver appeared to be nothing more than short covering. Technical buying brought prices above the $4.93 level, funds began
covering short positions, and we went above $5.00. Another wave
of stops were triggered above $5, and we went to the $5.12 high before profit taking, but prices closed near the highs of the day.
Monday's rally did not spill over to the other precious metals, gold
moving up $1.50 with no fundamental reasons for the metals to be
moving higher. On Tuesday it was revealed that a shortfall in silver supplies may have lead to the gains on Monday.
Overnight, gold moved thru critical resistance between $333-334. Opening up $4.00, closing up $6.50 for the greatest gain one day gain for nearly 4 months in the gold market. Next resistance at $340-341, then toward $350. Silver continued to add to yesterday's gain, up another .12 at $5.232. There hasn't been any significant news on inflation or
interest rates to move these markets, however, there is something going on in these markets with fund interest coming in to the market
and today was a bit more than short covering, with new longs entering the market. We'll have to see how much longer this rally can go before we see some profit taking, but it appears that we have turned the corner in the precious metal market.
Despite My wrong prediction regarding the crash, a strong possibility
exists for the downturn to happen before the end of 1997. |
