Bad week for stocks as the General Market fell 4.3%, bringing the 11 day decline to over 8%, (SPY 263.25) but holding above the October 29 low (SPY 259.85). The cycles appear to have inverted with the low coming in now, pushing the next high back to mid December. We do not expect the decline to accelerate from this level. A modest new low is likely with SPY 262.29 as a good target. With only intermediate to longer term bearish divergences on our Upside/Downside Volume studies having occurred, a bounce-back rally is needed to complete the near-term bearish pattern, before a break to new lows. Major Fib resistance 277.12.
Spot gold ended the short week virtually unchanged, (1222.30) after making a stab at 1233 resistance, despite the strong Dollar. Actual high 1230. Look for a Friday close over 1233 (5 month closing high) to constitute a break-out for a run to 1310. After registering a 5 week high in bullish Daily Momentum, the shares settled for a small Weekly loss (XAU 65.27). Look for an XAU Weekly close over 68.82 to turn our Daily 89 period trends higher.
After a steep decline the prior week, the greenback bounced nearly 1%, with UUP closing 25.87. Strong Fib resistance 26.04. Fib support 24.68 – 24.32 (strong).