Stocks With the break-up in US/China trade negotiations, stocks had a volatile week — cratering on Monday to start the week — falling 5.1% (SPY 279.93) from the May 1 high (294.95), but managed a strong come-back, closing 285.84. With the New Economy sector giving up more ground when compared to the Old Economy – registering 7 week lows – and with our Upside/Downside volume studies, Momentum and Breadth still giving off bearish signals, stocks are primed for more downside, after an important high is put in around the end of May. SPY Fib support 277.65 (strong). SPY Fib resistance 290.48.
Bullion started the week strong, rallying into spot resistance 1298 – 1305. Actual high 1302.20. Then fell sharply for the rest of the week, settling 1277.40, after touching 1274.50 on Friday. The shares, showing surprising relative strength, actually had an up-week, with the XAU closing 67.49, a fractional gain. Key metrics to look for. An XAU Monthly close over 76.96 will start bull move, breaking speedline from 8/7/16, and crossing over both 89 line trendlines, turning trends bullish. For the metal: Spot gold print 1311 will likely take spot to 1325 and confirm the low of this cycle is in rear view mirror. Then Weekly close over 1360 will start run to 1600. All part of Summer rally, while stocks enter bear market. For metal ETF’s: GDX Daily close over 21.79, GLD Daily close over 122.61, SLV Daily close over 14.40 turn trends bullish. Spot gold 55 week mvg avg 1268.72. Mkt has had Weekly close over mvg avg for 21 consecutive weeks.
The greenback was strong, matching multi-year highs (UUP 26.35) as the trade war intensified the international scramble for Dollars to meet obligations. A strong close under UUP 25.85 will start bear phase and should coincide with market top.