Thursday, May 01, 2014

gold, sivler, and crude oil - plus a stock market update

Here are daily bar charts of three of the biggest commodities markets: gold, silver, and crude oil.

I think gold and silver are in bear market which are going to take prices a lot lower. My ultimate downside target for gold is its 850 high made in January of 1980. I think silver will drop at least to $13 and given the market's relative weakness may go a lot lower than that. The 1991 low in silver was $3.50 and keep in mind that, in contrast to gold, silver's 2011 high was just about the same level as its 1980 top.

Crude oil traded as high as $147 in 2008 and dropped to $35 six months later. The midpoint of that trading range is $91 and the market has been oscillating around this midpoint for quite some time now. I think crude oil has just started a drop which will  match the size of the $21 drop which started from the August 2013 top. Another $21 drop would bring crude down to $83 or so which is in the vicinity of several lows made in 2012 and 2013. I think crude has a lot more downside potential than that but the lowest price I can calculate using my methods is around $60.

The US stock market remains is still in its bull market trend which began in March of 2009. This bull market is more than 5 years old now which makes it one of the longest in recorded history. But the Dow, the S&P and the NYSE advance decline line are not only well above their rising 200 day moving averages but also above their 50 day moving averages. Until two of these three indicators drop below the 50 day moving average I think prices will continue higher. My upside target for the S&P right now is about 1960.

1 comment:

Bob said...

We shall see. I think the Dow goes higher into late 2015 and then we head radically lower from there. Silver sub $13, that would be something. It is possible.