Stocks made new lows (SPY 259.85) to start the week, then proceeded to rally 3% off the low, finally settling 271.89, up 2%. The market is going through the time consuming process of “filling out” the right shoulder, of a massive H&S top, going back to Feb 9. For the weeks trading, there was an improvement in Upside Volume, which leads us to conclude that several more weeks of volatile, sideways trading with an upside bias is the likely scenario. An important high is due around November 23. SPY Fib resistance 277.98 – 282.71 (strong).
The gold cartel, with timely, massive paper selling drove the metal by mid-week to spot 1211.50 — but failed to keep it under 1220 — finally settling 1232.50, virtually unchanged from the prior week. To put the amount of market manipulation in perspective, in the past 10 years while the cartel was unleashing millions of paper contracts to set the price under the physical market, China and India have accumulated 29,000 tonnes of gold, the total mine production for that period (www.goldchartsus.com). At some point this manipulation will not work, as Mother Nature can’t be fooled forever. The gold shares (XAU) resumed leadership, recording a 3 week high vs the metal, on a 9 month high in Upside Volume. A break over 82.58 will project the shares to Fib resistance 102.62.
As long rates gapped to the highest level since March 2017, the Dollar managed a small gain (UUP 25.71) on the way to major overhead Fib resistance 26.04. Strong Fib support UUP 24.69.