Stocks topped last week after a stunning 7% run over 6 days, and should now spend a few weeks of sideways trading, bound by a range of 291.50 on the high and 283 on the low, until sufficient Bearish Momentum Divergences show, to propel stocks below our 89 line trendlines at 283 on a Weekly closing basis. Trading volume was at a 7 week low, and a Bearish Weekly Squat was generated. Market Breadth fell considerably and the New Economy sector failed to show leadership, closing on the lows for the week.
The metal traded at its highest level in over a year, but as it threatened a Friday close over 1360 on a Weekly basis (actual high 1358), pulling in all the trend-followers, the cartel bombarded the futures with paper shorts, driving the metal down $21 off the high, a bounce brought it back to close 1341. Spot should find good support 1320 (GLD 124.54). Gold is poised for a sustained upside breakout this Summer. The reason the metal found impenetrable support around 1266 has to do with Russia, China, India and Turkey, who continue to buy physical at a prodigious rate. The gold shares led the metal last week with an 8 week high when compared to spot. SLV tested the bullish falling wedge breakout (13.72) and are poised to clear 14.16 to turn our 89 line trendlines bullish. GDX Fib support 22.73.
The greenback has held firm for the past 6 weeks, trading in a 47 point UUP range. (26.47 – 26.00). Closing 26.31. Our ADX is trending toward “big-move” level, and should break lower this Summer as gold heads higher. A Weekly close under UUP 26.02 will turn trends bearish.