EQUITY INDICES
Having recovered most of the ground they lost in early April, is it not possible that the US indices are about to make another high rather than a low?
I ask this because of the 87-day cycle, which is turning just around now. Since the markets have rallied strongly into this period, the logical conclusion is that a high is more likely than a low. However, that is not my interpretation. There are few other technical indicators that are suggestive of a high right now. So, while we could theoretically see a corrective period extending into late June/early July based on this model, my call remains for further gains. I am looking to buy intraday rallies on Wall Street.
Click here for analysis of some leading equity indices.
COMMODITIES
Commodity markets tend to have short V-shaped tops and multi-W-shaped bottoms. This is the opposite of pattern to what we typically see in the stock market. And it’s one reason I don’t think that silver has reached its final peak yet.
Although it lost almost 50 per cent of its value from the highs of late April 2011, the action is more reminiscent of a correction within an uptrend than a primary downtrend. Once this process is completed, I expect the semi-precious metal to head back to that $50 level and indeed go above there. That process is not yet underway, going by the state of silver's daily and intraday charts, however.
Click here for analysis of some leading commodities.
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Dominic Picarda is a Chartered Market Technician and has co-ordinated the IC's trading coverage since 2006. He is a regular speaker at trading and investment events and also holds the Chartered Financial Analyst qualification.
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