Stocks emerged from MLK Day, falling 2.2%, then recovered, but failed to exceed the level of the prior weeks close. An improvement in Market Breadth, led by the New Economy sector, will likely give the market a few weeks of staying power. Fifteen days, and counting, of consecutive bullish momentum needs to be “worked off”, which only the passage of time can accomplish. We’re looking for a pull-back to Fib support SPY 254.47 – 252.52 (strong), and then a bounce into early February, before stocks seek lower levels.
Spot gold closed the week at 1303. the highest close since May 18, 2018, and for the fifth consecutive week sits above the 55 week mvg avg (1259.24), and at an 8 month high vs the Dollar. While this bull will not be stopped, stiff Fib resistance should show up GLD 123.86 (spot 1313-1315) from where the breakdown last occurred, and the cartel should vigorously defend this area. The same situation applies to silver, with Fib resistance SLV 15.07 – 15.12 (spot silver 15.82 – 16.00). SLV close over 15.23 turns Weekly trends bullish. Gold shares (GDX) held Fib support (20.45), gapped out of its base on Friday, heading toward strong Fib resistance (21.70). GDX close over 21.82 turns Weekly trends bullish.
The greenback found stiff resistance on its bounce-back UUP 25.66 (actual high 25.68), then dropped sharply closing Friday 25.44. A bear run should begin with Fib targets 24.68 – 24.32 (strong).