The Right Way To Trade

The Right Way To Trade

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Stocks, Gold & Dollar Commentary September 30, 2019

Stocks
Stocks continued its correction, off the Bearish Weekly Squat, into good Fib support (SPY 293.08). Actual low 293.69 late Friday, before bouncing late, closing 295.40, netting less than a 1% decline for the week. The big takeaway: The New Economy sector weakened — playing catch-up on the downside — producing an 18 day low when compared to the Old Economy. We’ll be looking for continued under-performance as the market bounces, over the next 1/2 weeks, as Bearish Momentum Divergences show up. Expect a minor bounce from SPY 293 Fib support. A Weekly close under 292.84 should see a sharp decline to 287.75 (strong Fib support). SPY Fib resistance 299.74.
Gold
Spot gold ended the week $20 lower, after wild swings from 1536.60 to a Friday low 1485.90, settling 1496. The gold shares rallied into Fib resistance early in the week, but followed bullion down, ending nearly 4.0% lower on the week, with XAU closing 91.07, down nearly 11.0% from the high 5 weeks ago. This correction was expected, and should be nearly spent. An important PM low is due next week (Oct 1/3). Maximum downside for spot is 1467 – 1465. A number of the individual stocks generated Bullish Daily Squats on the Friday sell-off, as well as the SLV. GLD sup 137.77, SLV sup 15.66, GDX sup 25.52 (all strong!).
Dollar
The shortage of Dollars in the repo market, apparently affected the availability of the greenback in international trade, causing a spike in the UUP to new all-time high ground (UUP 27.06). Maximum upside UUP 27.15/27.16. A 26.77 print will break an enormous rising wedge formation going back to June 26. Fib support UUP 26.47 (strong).

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