The General Market closed Friday on a new high, (fueled by a better than expected GDP report) lead by the strength of the New Economy sector, which closed at new decade highs and shows no inclination to slow down. On a bearish note, trading volume was the slowest in over a year (ex holiday weeks), while complacency levels, once again are approaching historic lows, a prescription for bad things to happen. Stocks have gained an amazing 25.2% since the bear market low on Dec.26. While stocks are likely close to a tradeable high, we see no more than a 3.5% correction at this point. For significant price weakness to set in, and Bearish Momentum divergences to set-up, at least another 20 – 40 days of time needs to pass, which would set up for an important peak towards the end of May. SPY Fib support 284.36 – 283.20.
On Tuesday, gold tested the 55 week mvg avg (1268.04) with low spot touching 1266. By Friday, the spot market rallied to 1289, settling 1286. It’s likely, with our projected low mid to late April for this cycle, gold has seen its low.
A strong close over 1360 will take the metal to 1600, with the Summer months setting up for an explosive period. The PM’s (gold, silver & shares) have tested and bounced off important support levels, and are ready to move significantly higher. GLD Fib resistance 124.39. SLV Fib resistance 14.73. GDX Fib resistance 22.50.
On the strength of the strong GDP report, the Dollar broke into new multi-year high ground (UUP 26.35).