The General Market crashed 7.0% last week, and has now fallen 18.5% from the high registered on Oct. 3, barely escaping bear market territory (-20%). However, using Dow Theory, a valid bear signal was triggered on Oct, 14, the first in 11 years. indicating a reversal of the primary trend. With a 10 month high in Bullish Momentum still left standing, a strong bounce of 5 – 8%, taking stocks back to the breakdown point in the H&S top, just completed, is still a good possibility. SPY Fib resistance 260.95.
Spot gold rallied $17, closing 1255, challenging the 55 week mvg avg (1256.52), after trading as high as 1268. The shares bounced 1.6%, falling back as it approached strong resistance GDX 21.70. Actual high 20.84. Strongest break-out volume in over a year brings with it good news and bad news. In the long term, massive break-out volume shows good buying pressure. In the short term, very often it puts in a top, requiring some consolidation. GDX Fib support 19.80. The shares still lead the metal, recording a 9 week high.
The Dollar was volatile, (as the Fed raised rates 1/4 pt, with no indication of a pause) closing modestly lower (UUP 25.96). A strong close under 25.45 (convergence of our fast and slow 89 lines will project UUP 24.68 – 24.32 (strong).