Stocks declined 1.3% last week, finding SPY support 296.50 (actual low 296.70), bounced to 300.00, before closing near the lows. Friday’s action generated the worst bearish momentum in 7 weeks, and have finally completed the Bearish Momentum set-up we were looking for, and are now ready to go down. A final rally into a high day around July 31 is expected, as the Fed cuts interest rates. SPY Fib resistance 301.25. SPY Fib support 295.64, 294.82. A Weekly close under 288.26 turns our 89 line trends lower.
It was a wild week for the precious metal, with a $54 range (1399.50 – 1453) settling 1425. The gold shares continued to lead the group, gaining nearly 7.0%, and multi-year highs when compared to the metal. The cartel was determined to not let gold close over 1435, as that would have likely attracted managed money, and prompted a parabolic rise. However, the “genie” is out of the box, and after some corrective action, 1670 is in sight. (Target from H&S bottom formation). The fundamentals to hold gold for the very long term has never been brighter, as 40% of global debt yield negative returns, with U.S. debt heading there as well, in a low growth stagflation economy. Silver actually rose from slumber, and out-performed gold, rising 9.0%, with spot touching 16.55, and SLV 15.54, approaching Fib target 15.73. SLV Fib support 14.56, spot 15.51. GDX Fib resistance 28.36, 30.70.
A volatile week for the greenback, as it held Fib support UUP 26.10, settling 26.29. Look for Weekly close under 26.10 to turn trends lower and 25.72 for support.