U.S. Stock Market Top! Finally!!

Just a quick note tonight about the U.S. stock market:

While most major benchmark indices closed up on the day today, the intra-day action looked to me like a genuine exhaustion pattern where prices gapped higher (again), posted all-time record highs in the morning (again), and then faltered notably in afternoon dealings.

After three straight interest rate cuts from the Federal Reserve this year, and lots of monetary stimulus over the last 8 weeks in the form of massive repurchase agreements and another round of quantitative easing, stock market investors should not expect any additional bullish support from this key contributor. A potential 4th interest rate hike from the Fed in December has almost been completely ruled out in the Fed Funds futures market, and even a potential January 2020 interest rate cut now faces low odds.

While almost no one expects a repeat of last year's 4th quarter collapse in the U.S. stock market (which clipped 20% from most major indices), I now see a fairly swift 10% correction over the very near term.

Here are two very interesting charts which show how extended most major U.S. stock market indexes are right now:

Nasdaq-100 Index (QQQ) Weekly Chart with 200-Week Moving Average and 3D Bollinger Band

S&P 100 Index (OEX) Weekly Chart with 200-Week Moving Average and 3D Bollinger Band

Gold & Silver Update

In my June 1st, 2019 update, when Gold was $1300/oz and Silver was $14.50/oz, in this column I wrote the following:

From my June 1st update: "Bottom line: Gold and Silver prices have entered the early stages of a major bull market. Before year-end 2019, Gold is projected to advance to $1,500/oz (+15% from current levels) while Silver is projected to advance to near $18.00/oz (+25% from current levels). Of course, if these two forecasts are accurate, then gold and silver mining shares can be expected to double and even triple over the next several quarters! In early 2016, this same kind of percentage rally in Gold and Silver prices triggered gains of more than 500% in many precious metals mining stocks in just seven months (see weekly chart of First Majestic)!!"

Now: with Gold trading at $1550/oz and Silver trading at 18.50/oz, projected upside targets for both gold and silver from June 1st have been met and it's time to exit all precious metals positions, including mining shares (many of which have doubled), in favor of the safety of sideline cash.