Stocks closed out the week on an up-note, after an early, relatively minor decline of 2.7%, not quite reaching SPY support (276.90). Actual low 277.64. Against the back-drop of an about-face by the Fed — halting rate increases this year — traders are emboldened to push stocks ever higher, despite weak economic news. With four consecutive weeks of shrinking ranges, an unsatisfied Bearish Weekly Squat, and the slowing of the New Economy sector, stocks are ready to undergo a decent correction — after early week strength. High day April 2/3. Strong bounces can be expected off 274.80, with 259.83 strong Fib support. SPY Fib resistance 283.57.
The metal had a rocky week, first showing strength, trading into spot resistance 1324, then declining steadily to 1286 (GLD 121.90), before settling 1292.30. This is in keeping with our forecast for a long period of consolidation, prior to a mid May breakout, and the continuation of the bull market. For the second consecutive month, the gold shares were on the cusp of a significant breakout with a Monthly close over XAU 78.45, only to be thwarted on the last week of the month (closing 76.36 from 3/27 high 79.89). The shares ended down around 1%, but still showed relative strength compared to bullion. Spot gold strong support 1281 – 1271. GLD Fib resistance 125.89. GLD Fib support 119.62.
SLV Fib resistance 14.74, SLV Fib support 13.90. Spot gold 55 week mvg avg 1266.72.
The greenback was strong, (UUP 26.03) gaining 1%, and refusing to close under our 89 line trendlines that are merging (25.71). A test of 6 month high is likely (UUP 26.12).