Stocks fell 2.0% in a choppy week of trading in very light volume, as US/China trade positions hardened, but did not go to new lows, as our 89 line trendlines held support (SPY 280.57), settling on the week 282.78. With the New Economy sector leading the downside, (11 week lows when compared to the Old Economy) stocks are primed to continue to go lower, after bouncing to a high day around June 3. SPY resistance 287.31, 289.40. A Weekly close under SPY 280.57 turns trends lower with projected support targets 277.65, 271.01, 263.43.
Spot gold successfully tested its 55 week mvg avg (1269), actual low on 5/21 1269.50, then rallied over the next 3 days to settle 1284.70. The fly in the ointment is the relative weakness in the PM shares which fell to 6 month lows (XAU 65.85). International investors are the main constituency for the sector and multi-year Dollar strength may be playing a role in the shares unusual weakness. Triple Bullish Momentum Divergences mean we are very likely at the low. To confirm the metal low for this cycle, we’re looking for spot gold to print 1325. However, this late in the cycle, a spot print 1304.20 (7 week highs) will likely do the trick, on the way to a Weekly close over 1360 for a Summer bull run to 1600. Key metrics: GDX Daily close over 21.76, GLD Daily close over 122.52, SLV Daily close over 14.30 turn trends bullish.
A major reversal on Thursday, after touching multi-year highs (UUP 26.47), the greenback closed down on the week (UUP 26.25). A strong close under 25.91 will start bear phase, and confirm high.