The Right Way To Trade

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Stocks, Gold & Dollar Commentary August 12, 2019

Stocks
Stocks fell 7.9% from the July 24 high last week – but you wont find it on the S&P chart. It is hidden by the collapse Monday by the e-mini futures which fell equivalent to SPY 278.39. The subsequent rally by the emini carried SPY to 288.04 by Tuesday’s close, a full 10 points higher. Stocks had every reason to turn our trends bearish with a Weekly SPY close under 289, but the spectacular rally, led by the new Economy sector on Thursday, brought SPY comfortably above our bearish 89 line trendlines, and in the process, significantly improved Breadth, so another strong bounce is likely before any immediate downturn. A bullish Weekly Squat on a 6 month plus high on volume further supports a rally. SPY Fib resistance 294.59. A Weekly close under SPY 290 turn trends bearish. Ultimately expect to see SPY Fib support 266.09, 249.30.
Gold
Spot gold surged $57, closing Friday 1497.50, after trading to 1510 over 3 days, finally held under 1500 by a heavy barrage of paper shorting by the cartel. Our short-term target for gold remains 1670, but will it do it by August 27, our projected date for an important top — or after the September correction?¬† The gold shares (XAU) traded to the highest level since October 2016 (98.78). Silver finally broke through overhead resistance (SLV 15.73) closing 15.89.¬†Silver should now take the lead and start to close the gold/silver ratio, with an initial target of 60 by the end of the year. GLD Monthly Fib resistance 143, 153.15. SLV Monthly Fib resistance 26.19, 34.63. GDX Monthly Fib resistance 33.63, 46.37.
Dollar
The greenback fell less than 1% (UUP 26.46) off an 11 year high recorded on August 1 (UUP 26.79) in what is looking like a classic “3 drives to a top” (March 2015, January 2017, August 2019). A Weekly close under 26.22 turn trends bearish with an initial target UUP 25.76 Fib support.

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