Coming off the onslaught of the prior week, stocks bounced 2%, then fell-back to close virtually unchanged. Our studies remain solidly bearish, with Leadership being the most notable, as The New Economy sector fell to 6 month lows vs the Old Economy. While SPY may break under the recent low (270.36), and find Fib Weekly support 267.79 – 261.25, a few more weeks are likely needed for the right shoulder, of a massive H&S top, to be filled. Fib resistance 283.32 – 286.63. An important cycle high is due on, or around, November 3.
Despite a 10 week closing high in the Dollar, gold managed to overcome cartel paper selling, and close 1226.50. This week is critical to see if spot can hold the 1220 level, which may be tested. The shares (XAU) managed a 9 week high, but with a bearish Weekly Squat formed, a pullback into Fib support (67.56-66.44) is possible before moving higher. XAU 83.69 is the key level for a major break-out in the shares.
The Dollar, once again, tested Fib resistance 25.53, and closed at a 10 week closing high (25.46). Strong Fib resistance 26.04.