The Right Way To Trade

The Right Way To Trade

+menu-


Stocks, Gold & Dollar Commentary October 29, 2018

Stocks
Stocks were hit hard, falling 5%, (the full decline from the high is 11%), but recovered some ground at Friday’s close, after reaching the base of the right shoulder in, what will be seen, as a massive H&S top formation, going back to the February 9 low. SPY came within one point (262.29) of touching Weekly Fib support 261.25. The right shoulder now needs some filling. With the 2nd highest volume in 18 weeks, the sell-off appears climactic. Remarkably, while the FAANG stocks were mostly brutalized, The New Economy sector as a whole showed relative strength when compared to the Old Economy, recording a 2 week high. A period of 2 to 5 weeks of choppy, volatile, sideways trading with an upside bias is the likely scenario over the next month, with high days due, on or around November 6 and 23. SPY Fib resistance targets 278.88 – 283.20.
Gold
The yellow metal was firm, after testing 1220 support, then bouncing as high as 1243, finally settling 1233. The Bearish Weekly Squat badly damaged the shares, with XAU falling 7.0% (65.17), on a multi-month high in volume, as weak holders bailed out. We’ll look for a Bullish Weekly Squat around Major Fib support 62.95 to start next rally for an eventual break-out through 82.76.
Dollar
The Dollar traded to a 6 month high (UUP 25.75) as a Bearish Weekly Squat formed, indicating the Dollar should weaken in the near-term. Strong Fib support 24.64. Strong Fib resistance 26.04.

Comments are closed.