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  • Stocks, Gold & Dollar Commentary March 4, 2019

    Stocks
    Stocks ended the week with small gains led by the New Economy sector, on the lightest volume in 5 months. The market has rallied 19% for 9 consecutive weeks, even against two weeks in a row of Bearish Weekly Squats that should have, but failed to produce a significant correction. The current rally now just about equals the 19% rally from March 89 to August 89 that lasted nearly 5 months. At least in the short term, the Powell Put has done its work and continues to levitate stock prices. But, let’s remember the Bernanke Put never prevented the Great Recession. However, Mother Nature will not eventually be denied, with a big sell-off just around the corner. Joining our bearish Upside/Downside volume studies, are quadruple Bearish Momentum divergences, a lack of new highs in Market Leadership, and a sharp deterioration in Market Breadth. Look for a pull-back to SPY 274.62, followed by a good bounce, then a move down to SPY 268.32 where the battle for the continuation of the bear will be fought. SPY close under 266 will set up for eventual new lows.
    Gold
    The Precious Metals consolidation we spoke about has arrived, with spot gold declining $56 from 1346 on February 20 to 1290 on Friday. Markets generally are sitting in a broad area of support, and good bounces can be expected, but several weeks of sideways trading is needed, before the bull can reassert itself. Look for base-building over the next 8 -10 weeks, readying for a multi-week breakout to begin around end of April which will take gold through 1400. GLD Fib support 121.49 – 119.62 (strong). SLV Fib support 14.17. GDX Fib support 21.26. Monthly close over XAU 78.45 will turn Monthly trend bullish.
    Dollar
    A strong Friday bounce brought the greenback positive for the week (UUP 25.74). Look for a strong close under UUP 25.57 to turn our 89 period trends lower, and a bear trend to begin.

  • Stocks, Gold & Dollar Commentary February 25, 2019

    Stocks
    While we were wrong anticipating an immediate decline, stocks plodded through a holiday-shortened week of sideways trading, seemingly waiting forever for good news on a US/China trade deal, before ending the week with less than a half of one percent gain. It’s obvious, the market has become totally manic, following with the best January in 32 years, after the worst December in 87 years. With all indications abound that the economic back-drop is tanking, (too numerous to mention) the stock market decline is far from over. At a minimum, we expect a 35% decline off the highs. The low cycle day appears to have inverted with a high day now arriving on Feb 22/25. Our Upside/Downside Volume studies remain bearish along with Bearish Momentum Divergences. In addition last week was another classic Bearish Weekly Squat with the smallest range in 6 months, giving us two back-to-back Bearish Squats. SPY Fib support 267.16 – 263.71 (strong).
    Gold
    Spot gold rose $7 on the week, (1327.70) after almost achieving our maximum target for this move (1349). Actual high 1346 on Wednesday 2/20/19. A further consolidation is expected to last, at a minimum, until March 12, for both the metal and shares. A 4 month high in share volume (in a holiday-shortened week), and Weekly Bearish Momentum Divergence showing up, will likely put in a short-term top. GLD Fib support 122.56. GDX Fib support 21.92 – 21.26 (strong). SLV Fib support 14.64. In classic bullish fashion, the shares continue to lead the metal, recording an 18 week high vs gold. Look for a Monthly close over the XAU (4 more days) of 78.45 to turn Monthly trend bullish. XAU Fib resistance 82.12 – 82.60.
    Dollar
    The greenback weakened over the holiday week, but held Fib support UUP 25.65, closing 25.72. Look for a strong close under UUP 25.57 to turn our 89 period trends lower.

  • Stocks, Gold & Dollar Commentary February 18, 2019

    Stocks
    In a choppy trading week, stocks tacked on 2%, primarily on news of a pending break-through on a China/US trade agreement, and have thus gained a remarkable 17% since the bear market low (SPY 233.76) on December 26. However, the strength of this rally is not uncommon. In the two prior bear markets (2000 – 2002 and 2007 – 2009) there were 5 instances of rallies that exceed 17%, with the market continuing to make new lows – so it’s not different this time, at least not yet. It did not take long, but in one week, bullish and neutral sentiment combined (AAII) have actually exceeded the levels attained the week the market was making all time highs.
    With our Upside/Downside volume numbers remaining bearish, triple bearish Momentum divergences taking hold,
    and a bearish Weekly Squat on a 5 month low in range, (ex holiday weeks) the market is now ready for a significant pull-back. SPY Fib support 260.20 – 256.43 (strong). SPY near-term Fib support 266.87. Expect good bounces off these levels, and then significantly lower prices. Low day expected Feb 22/25.
    Gold
    The yellow metal was in corrective mode most of the week, with spot low on Thursday (1302.50) then bouncing strongly to close the week, settling 1321.  The metal sits comfortably bullish above its 55 week mvg avg (1262.35). GLD Fib resistance 125.57. In line with our forecast of PM consolidation, the gold shares traded down 3%, at its worst levels, then rallied to close unchanged for the week. Longer term, we’re in the sweet spot for much higher levels for gold prices – despite Cartel paper gold manipulation -  based on massive Central Bank buying, bullion tonnage moving from West to East, at the same time world production is set to decline, while world-wide mergers are intensifying. GDX Fib resistance 24.23. XAU Fib resistance 82.12 – 86.70. Look for Monthly close over 78.45 to turn Monthly trend bullish. SLV traded to near term Fib support 14.65, closing 14.82. SLV Fib resistance 15.88 (strong). SLV Fib support 14.46 (strong).
    Dollar
    The greenback continued firm, running up against strong Fib resistance (UUP 25.92). Actual high 25.90. Then selling off, closing 25.79. Range trading is likely (UUP 25.92 – 25.31) until stocks break down.

  • Stocks, Gold & Dollar Commentary February 11, 2019

    Stocks
    With an initial 1.4% bounce to start the week, (SPY high 273.44) and within a scant 46 ticks from major Fib resistance (273.90) stocks have tacked on 16% since the bear market low (SPY 233.76), and has collided — and stopped — at the 200 day mvg avg. As pointed out, this is not uncommon for stocks to show extreme strength from a bear market low. In the 2007 – 2009 bear market, from close to close, stocks rallied over 24% from the low. And then went on to make new lows, given the benefit of time. However, what may be different, stocks have exhibited staying power, with the New Economy, compared to the Old Economy, registering 15 week highs. So, while we’re still bearish long term, (our Upside/Downside Volume studies remain bearish and Momentum has started turning negative, as well as Market Breadth) we’re likely in an interlude period, which should last several more weeks before new lows are seen. Despite the fact that every major sector of the economy has lowered forward guidance, what’s needed for the next major leg down, and new lows, is an extreme build-up in bullish sentiment, as stocks meander through this choppy period over the next 6 – 8 weeks. An important low point is due around March 22. Fib Support SPY 258.52 – 253.63 (strong).
    Gold
    Spot gold never traded above last weeks close (1317.50) trading in a $14 range for the week (1316.20 – 1302.60) settling 1313.50. It’s likely with our original price objectives having been met, the PM’s will go through several weeks of consolidation. Maximum spot price on this move 1349. The gold shares, (XAU) while flat on the week, continue to lead the metal registering a 26 week high, despite a firm Dollar. XAU resistance 82.12 – 86.70. Look for a Monthly close over 78.45 to turn Monthly trend bullish. GLD Fib res 125.57. GLD Fib sup 121.81. Silver fell 9 cents, finding good support on the pullback. SLV Fib sup 14.46. Much longer term, as the precious metal bull goes into “over-drive” look for a Monthly gold close over 1378 to trade to 1700, and on the first monetary reset, trade to 2300.
    Dollar
    Dollar action fooled us, reversing the prior weeks decline and bouncing back above our key trend 89 lines.
    Fib res UUP 25.92 (strong).  Range trading UUP 25.92 – 25.31 is likely scenario while stocks don’t break down.

  • Stocks, Gold & Dollar Commentary February 4, 2019

    Stocks
    With the General Market gaining 1.3% last week, led by the New Economy sector (all in the last 3 days, after the Fed took a pause in raising interest rates, and floated good news about a breakthrough in US/China trade talks), stocks have tacked on an amazing 15% from the December 26 low (SPY 233.76). Not uncommon after an initial bear market low. With economic data worsening (almost 20 large, bell-weather companies have lowered forward guidance), it’s likely stocks are close to a terminal point, having reached strong Fib resistance SPY 271.01 (actual high 271.20). Bearish Momentum is finally showing up — a necessary prelude to the coming decline — stocks should enter a choppy, trading period, over the next two weeks, before heading sharply lower. Fib support 253.34 – 251.04 should arrest the initial decline.
    Gold
    Spot gold traded 1326 on Thursday, before pulling back Friday to settle 1317.50, up $15 for the week. The gold shares led the group gaining nearly 7%, with XAU settling 75.91, and firmly establishing strong leadership, recording a 6 month high vs the metal. Daily bullish momentum went off the charts, reaching  a 27 month high. XAU resistance 82.12 – 86.70. Look for a monthly close over 78.45 to turn Monthly trend bullish. GLD res 125.57. SLV ran into Fib resistance 15.07 – 15.12. (Actual high 15.19) before settling 14.92. A brief period of consolidation is likely.
    Trapped shorts for the 4 month period between 8/18 – 12/18 will provide support under the market on any good pullback.
    Dollar
    With the Fed standing pat on interest rates, the Dollar fell slightly, and should start a decline towards Fib support
    UUP 24.68 – 24.32 (strong).

  • Stocks, Gold & Dollar Commentary January 28, 2019

    Stocks
    Stocks emerged from MLK Day, falling 2.2%, then recovered, but failed to exceed the level of the prior weeks close. An improvement in Market Breadth, led by the New Economy sector, will likely give the market a few weeks of staying power. Fifteen days, and counting, of consecutive bullish momentum needs to be “worked off”, which only the passage of time can accomplish. We’re looking for a pull-back to Fib support SPY 254.47 – 252.52 (strong), and then a bounce into early February, before stocks seek lower levels.
    Gold
    Spot gold closed the week at 1303. the highest close since May 18, 2018, and for the fifth consecutive week sits above the 55 week mvg avg (1259.24), and at an 8 month high vs the Dollar. While this bull will not be stopped, stiff Fib resistance should show up GLD 123.86 (spot 1313-1315) from where the breakdown last occurred, and the cartel should vigorously defend this area. The same situation applies to silver, with Fib resistance SLV 15.07 – 15.12 (spot silver 15.82 – 16.00). SLV close over 15.23 turns Weekly trends bullish. Gold shares (GDX) held Fib support (20.45), gapped out of its base on Friday, heading toward strong Fib resistance (21.70). GDX close over 21.82 turns Weekly trends bullish.
    Dollar
    The greenback found stiff resistance on its bounce-back UUP 25.66 (actual high 25.68), then dropped sharply closing Friday 25.44. A bear run should begin with Fib targets 24.68 – 24.32 (strong).

  • Stocks, Gold & Dollar Commentary January 22, 2019

    Stocks
    The pull-back off last weeks bearish Squat lasted exactly one day, amounting to 1%, before rallying four days (in options expiration week) for another 3% bounce to SPY 266.98, on a 14 week low in volume, (bearish) and fulfilling our projected first bounce of 12 to 14% off the bear market low (actual 13.7%). Stocks now sit at important resistance, having touched our fast 89 line on Friday. Our Upside/Downside volume numbers remain bearish throughout the 16 day rally. With the bearish Weekly Squat remaining unsatisfied, we expect a sharp pullback at any time, into Fib Support SPY 254.47 – 252.52 (strong), — then another bounce — which should be the final bounce, before stocks crater to new lows. This choppy trading will take us into early February.
    Gold
    As suggested last week, the metal hit our projected target 1294 – 1310, and is in the process of consolidating the 11% rally from 1167 in August 2018, to the prior weeks high of 1297. The 1280 Fib support level was touched on Friday, with spot closing the week 1281.30. Maximum Fib support 1269 – 1260. In keeping with golds’ safe-haven status, silver under-performed, but still closed comfortably above both our key 89 lines. It’s important for gold investors to fully appreciate that gold is in a strong bull market around the word, having reached at, or near all-time highs, in 72 countries (currencies) while being constantly suppressed in US Dollar terms. GLD Fib support 119.25. GDX Fib sup 19.67. SLV Fib support 14.07. The gold shares are maintaining bullish Upside/Downside volume readings. The 55 week mvg avg for spot gold is 1258.43.
    Dollar
    A bit of a surprise, as the Dollar (UUP) bounced back into our two 89 lines, closing 25.56. UUP should find strong Fib resistance at 25.66, before starting a bear run, with Fib support 24.68 – 24.32 (strong).

  • Stocks, Gold & Dollar Commentary January 14, 2019

    Stocks
    Stocks had a good week, tacking on 2.0% on four out of five up-days, closing the week out flat. The General Market has now gained 10.6 in 11 trading days since the low (SPY 233.76) on December 26, on its way to an eventual 12 to 14% bounce off its first bear market low — with the reversal of the Primary Trend having been established — this is typical of first bounces off the bear market lows as in 2000 and 2007, which saw 12% bounces. SPY 263.51 is an important Fib target. But first, a consolidation, and pull-back is likely, with last weeks Bearish Weekly Squat on a 14 week low in Weekly Range. SPY Fib support 247.17. A high day is due January 22/23.
    Gold
    Several weeks ago we put out our target for spot gold at 1294 – 1310. That target was reached with a spot 1297 print last Thursday, January 10. Fierce cartel paper selling near the highs, drove down the spot price to 1280, before settling 1288.20. Both gold and silver will likely go into consolidation, which is very healthy, and a precursor for a strong next leg up. Spot gold will find Fib support 1280. Silver 15.60. In the event of an all-out cartel raid, maximum Fib support 1269 – 1260.  Important to note that spot gold has now completed its third consecutive week over the 55 week mvg avg 1258.01, solidifying the bull move. GLD Fib resistance 123.86. GDX Fib resistance 20.77. The gold shares were flat on the week but registered a 7 month high when measured against the Dollar.
    Dollar
    The Dollar (UUP) fell decisively through our 2 converging 89 lines (bearish) to settle 25.36, and now projects UUP 24.68 – 24.32 (strong) and the start of a new down trend.

  • Stocks, Gold & Dollar Commentary January 7, 2019

    Stocks
    Wild and unexpected swings continue to characterize the markets. On news of a strong jobs report, stocks surged 3.5% on Friday, and have now clawed back 8.1% from the low (SPY 233.76) registered on December 26. With the current rally, the market has worked off the bullish momentum we’ve been waiting weeks for. With a 10 week low in range, a Bearish Weekly Squat was registered. It’s likely the Weekly Range will narrow further, as stocks approach strong resistance. The New Economy sector failed to lead the rally, recording 4 week lows vs the Old Economy. With the reversal of the Primary Trend, its only a matter of time before the markets break to new lows. But first, it’s likely a few more weeks of wild swings, with SPY 257.15 to a max 263.51 as important Fib resistance targets. An important high day is due around January 11.
    Gold
    Bullion surged $18 to spot $1296, — a 7 month high — before falling back on heavy cartel selling, settling 1284.20. The shares (XAU) surged 3.1% closing 71.87, a 5 month high.  GDX, the largest gold share ETF was equally strong, and face important Fib resistance at 21.70. The gold shares reclaimed leadership over the metal, registering a 3 month high. Spot gold (1284.20) is now 2 consecutive weeks over the 55 week mvg avg (1257.45).
    Dollar
    The Dollar continued to fall into our key Daily 89 trend lines, closing UUP 25.46. A strong close under 25.45 (convergence of our fast and slow 89 lines will project UUP 24.68 – 24.32 (strong) and the start of a new down trend.

  • Stocks, Gold & Dollar Commentary December 31, 2018

    Stocks
    Violent and unexpected wild swings characterized stock trading last week, exemplified by the nearly 3.0% swing from Thursday’s low to the close in just the last hour of trading. The new reality: More than 80% of stock trading is incredibly fast — controlled automatically by machine algorithyms and passive investing — without any human intervention. With the reversal of the Primary Trend having been established, according to Dow Theory, and not an arbitrary 20% off the high, its important to understand that the market has changed after 11 years, and buy and hold is not a formula for success going forward. For the week, stocks gained 3.0%, led by the New Economy sector which registered an 8 week high when compared to the Old Economy. At least a few more weeks of choppy, violent trading is likely, as stocks continue to work off the previous Bullish Momentum. For the first time in recent memory, not a single stock registered a 52 week high on the NYSE. SPY Fib resistance 257.15 – 263.51 (strong). An important high day is due on January 11.
    Gold
    As stocks were going through its gyrations, spot gold surged, crossing over its 55 week mvg avg (1256.96) closing the week 1280.20, and registered a 7 month high against the Dollar. Important Fib targets spot 1294 – 1310. GLD resistance 122.44. The shares gained 1.5% and lagged the metal, but Weekly Bullish Momentum surged to an 11 week high. GDX resistance 21.70.
    Silver gained 5%, gapping over a 4 month sideways trading range trapping shorts. SLV Fib target 15.07 (spot 15.82).
    Dollar
    The Dollar fell 2.0% (25.50) into our key Daily 89 trend lines. A strong close under 25.45 (convergence of our fast and slow 89 lines will project UUP 24.68 – 24.32 (strong) and the start of a new down trend.