Last week we mentioned the buy signals for both GLD and SLV, however we were issuing these buy signals with much caution even though it's been many months.
On Friday SLV signal a possible bearish reversal after only one week...
This is a highly reliable signal and therefore we should take into serious consideration that the last SLV buy signal was false. According to Elliot wave theory, we should see a 3rd wave decline beneath the October 2008 low of 8.39 unless we are able to push above 13.94. Faces with this information we highly suggest putting in protective stops as silver seems vulnerable to a sell-off.
GLD has isssued a sell warning as well, although it's not as reliable. However, prudence maintains that you put in protective stops in case we do get a substaintial pullback. In light of this GDX has posted a buy alert, but we will not be convinced until we see a confirmation, which seems increasingly unlikely in the short term. Our previous sell signal was 31.95 on 1/09/09 and thus far GDX has not made any impressive gains, none that would convince us a new upleg in the market is underway.
DBE and energy ETF has issued a BUY alert as well - but we need to see confirmation. Oil has stabilized and the only thing dragging DBE down is the poor performance of natural gas.
Notice DBE was not able to go beneath it's Feb low. Coupled with this reversal we might see an imminent trend turnaround. There is a massive wall of resistance headed our way, but in the long run this cloud will begin to thin out as prices stabilize. We still wont see the supply issues impact us until later this year, and we have a long long way on the upside so there is little chance of missing the boat. Patience is key here and we will most certainly be watching for an official buy confirmation. DXO is another speculative play here as oil looks like it may have some more room for gains.
The PXE energy index issued a sell alert, but this is low reliability. However any broad market pullback will most likely affect this and therefore close watch is recommended.
The overall market rally is suspect, but given the positive spin on news, the market may continue to grind higher. While we may see an intermediate term pullback, Elliotwave analysis suggests an S&P move close to 1000 and the Dow near 9,000-10,000. We may offer some short position suggestions as we approach this point.
Once this move is finished agriculture is something we will be very interested in looking at. DBA is looking more favorable but has not issued any buy alert yet, however we see this as something coming soon.
So in summary - nothing to buy or sell this week. We'll post if there is anything official on any of the new signals given.
