Thursday Market Commentary – December 08, 2016
Stocks Hold to Buy - The previous bearish forecast proved wrong with most of the major market indexes heading higher this week, especially yesterday with the large upward move. The forecast now is for stock prices to possibly continue higher although at very overbought levels. Market optimism is reaching extreme levels suggesting a market top may be in the creation at least short-term. This current price breakout could be a “fake-out” breakout trapping new long positions if the market reverses to the downside. Always use stop-loss in either direction if the market goes against you on new positions.
Bonds Buy Short-Term Sell Long-Term – The current forecast for the 30 year T-Bond remains the same to rally to the upside after its recent severe selloff after the election. Conversely bond yields are setup to decline at the same time after their very quick and large rise. The 30 year T-Bond rally bounce should see 153 to 156 area or possibly a bit higher to 158, which would be another low-risk high-reward price area to sell short again at for the longer term.
US Dollar Index Hold Short-Term Possible Buy Long-Term –  US Dollar Index upside forecast still stands. Near-term support is 99.695 to 99.960. Longer term support is at 96.00. The potential exists for a much stronger US dollar longer term. If 96 breaks support, this bullish longer term forecast would be in question and the forecast could then turn bearish longer term.
Gold Silver Buy - Gold continues to consolidate its recent sell-off with the potential to head higher from here near term. Sentiment is still extremely negative currently. The forecast near term is higher, and possibly longer term too after seeing and reviewing further daily price action. Near-term resistance is 1,198 and a close above this price provides a more bullish forecast with a near-term upside price target of 1,233 to 1,250. A buy long position at current prices in gold and silver with a proper stop-loss would be a low-risk high-reward trade if it works out.
