Just when it appeared stocks were to finally undergo an over-bought selloff of some significance — in the wee hours Friday morning — Chevron decided it was finally ready to go shale big-time, and offered $33 billion for Anadarko, sparking another flight of madness, as stocks gapped higher, led by the New Economy sector, which recorded a decade closing high. The gain, however, came to only a half percent (from the previous Friday), bringing the 15 week run-up to 23%. With a 7 month low in Weekly Range, and the 2nd lightest volume in 6 months, a Bearish Weekly Squat was recorded. With technicals bearish and volume extremely light, (remember late September) stocks are vulnerable to any drop-off in economic expectations, which will be coming out in droves the next two weeks. The initial decline should not exceed 3.5%, followed by a good bounce, with SPY Fib support 281.99. SPY Fib resistance 291.
Gold had an erratic week, tacking on $20 by mid-week (1310.50) then falling back to settle 1290, slightly down for the week. The shares (XAU) fell 1.4%. Spot support for the metal 1281 – 1271, with a break-out coming around mid May on a strong close over 1360 spot. The shares need a monthly close over 78.05 to run to 3 digits. SLV support 13.90. A giant Bullish falling wedge formation is forming in SLV. Look for a strong Daily close over 14.40, to break out of the top of the wedge, for a move to 14.74 and 15.69 Fib resistance.
The greenback was down slightly all week, registering a 3 week closing low (UUP 25.96). A strong close under UUP 25.73 could get ugly, as it would appear ready to violate a H&S bottom formation, targeting UUP 25.38.