The week was characterized by huge volatility in both directions. First bouncing to just shy of Fib resistance 294.59 (actual high 294.15). Then falling 4.0% to 282.39 — gaining half back — with Friday’s rally to close 288.85. The net result was a Weekly close under 290, turning our two 89 line trends bearish. The culprit: The U.S. Treasury 2-10 yield curve inverted, which history tells us is infallible in predicting recessions. But, as the Fed continues to lower interest rates, this time may be different, with its firepower being limited with only 3 1/2 points to zero. It will take a Weekly close over 290 to get bullish, which we are likely to see an attempt early in the week. SPY Fib resistance 291.46, 293. SPY Fib support 275.66, 266.09, 249.30.
Repeated attempts, by the cartel, to keep gold from a Friday close over 1521 was successful, but nevertheless 1513.20 was the highest close since April 2013. High print for the week 1535.30 – low print 1479.30. There remains only about 7/8 trading sessions (August 27-28) before an important cyclical peak is due for the precious metal, with a correction likely during September. Our short-term upside target remains 1670. The gold shares made its high 8 days ago, and now lag bullion, when compared to the metal, with a 5 week low. Silver is starting to show some resilience to its huge sell-offs in the past, and should start to lower the gold/silver ratio to 60 by the end of the year. GLD Monthly Fib resistance 153.15. GDX Monthly Fib resistance 33.63, 46.37. SLV Monthly Fib resistance 26.19, 34.63.
The greenback bounced less than 1%, but on a Monthly basis still appears to be fulfilling the classic “3 drives to a top” formation, discussed last week. A Weekly close under 26.26 turns trends bearish with an initial target 25.77 Fib support.