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  • Stocks, Gold & Dollar Commentary May 22, 2017

    Stocks
    Stocks had a sharp 2% decline, touching our near term target SPY 235.58 (actual low 235.43!!), before a snap-back rally, recovering more than half the decline by Friday’s close (238.31). With Upside Volume, Breadth and Momentum continuing to flag, this is only the beginning salvo in a correction that could reach a maximum SPY 218.44. A more likely terminal point is SPY 227 – 226, before a final rally, where we anticipate a dramatic weakening in the New Economy sector to finally show up. This has not been the case up until now, as new highs were made despite the decline in the General Market. This choppy correction should carry for seven (7) weeks into the first week in July.
    Gold
    Failure to close for the 3rd consecutive week under its 55 week mvg avg (1237.83), which would have turned the trend lower, spot gold rose $28, closing out the week 1255.60, and recorded a 6 month high when measured against the Dollar. The shares lagged bullion, but nevertheless traded at a 4 week high, registering a Bullish Weekly Squat. On the Weekly, prices are butting up against the 89 line and a speedline from mid August 2016. With our Weekly ADX about to enter “big move” territory, an explosive move is likely.
    Dollar
    After holding steady for 3 weeks, the Dollar (UUP) broke Weekly support UUP 25.20, recording a 7 month low, and is now headed for bear market territory (3 consecutive Weekly closes under 24.63). Weekly Fib support 24.67 (strong).


  • Stocks, Gold & Dollar Commentary May 15, 2017

    Stocks
    On the outcome of the French election, SPY recorded an equivalent new high (240.32) in overnight futures trading, but it was short lived. For the week, a modest decline in the General Market, while the New Economy sector continued to vastly out-perform the Old Economy. With Upside Volume showing no improvement, Market Breadth worsening, and Institutional Distribution of stocks at 3 month highs, the immediate direction still remains down, with SPY targets 236.53 – 235.58 (strong Fib support), before another stab at new highs, where we anticipate a severe weakening in the New Economy sector, and the prelude to a more significant sell-off.
    Gold
    Cartel selling continued unabated to start the week off, driving the metal to major Fib support (1211 – 1215) before rallying to close out the week at 1228. But the real story for the precious metals was the leadership in the shares which rose 6% (XAU 84.97). Daily bullish momentum made an 8 week high. Look for 3 consecutive Weekly closes over 87.99 (89 line and intersecting speedline) for an explosive rally, as the Weekly ADX approaches “big move” territory (under 10). An important low is due next week around May 17.
    Dollar
    Despite the modest bounce, the Dollar is headed for Fib support 25.20 (UUP). Three (3) consecutive Weekly closes under UUP 24.61 and a new bear market in the Dollar will have begun.


  • Stocks, Gold & Dollar Commentary May 8, 2017

    Stocks
    Stocks continued its schizoid ways, with New Economy stocks at new highs when compared with the Old Economy, while registering the worst Upside Volume reading since the 2007 top. The big difference between this week and last was the failure of Breadth (decline of 70% in new highs) to keep pace with the advance. A classic Bearish Weekly Squat was formed with the smallest range in 19 weeks. With the French election on Sunday, and a strong Macron victory the likely outcome, a spike to new highs to SPY (240.32) is possible, followed by a sharp correction, with SPY 236.35 and 235.49 as good targets, before another attempt at new highs. We expect a failure in the New Economy sector, at that point, to fully align the market for a more significant sell-off.
    Gold
    Massive paper selling by the gold cartel (8 bullion banks engineered by the Fed) engulfed the precious metals, with gold dropping almost $40, closing 1229. Major Fib support 1215. GLD 115.96. Spot gold now sits about $9 under the important 55 week mvg avg (1237.70). We’ve been early in calling for a bottom, but nevertheless believe a reversal is in the making, with heavy physical off-take taking place, and gold & silver hovering near major Fib support. We expect a good bounce off the recent lows, and choppy sideways trading for another 8 days, with an important low due on May 17. Look for 3 consecutive Weekly closes over GLD 120.12 to get the gold bull going again!
    Dollar
    The cartel motivation for paper gold bashing was the pathetic performance by the Dollar (UUP) which went to 6 month lows against a basket of major currencies. The UUP is headed for Fib support 25.20. Three (3) consecutive Weekly closes under UUP 24.61 and a new bear market in the Dollar will have begun.


  • Stocks, Gold & Dollar Commentary May 1, 2017

    Stocks
    On the failure of a Le Pen victory in the French election, stocks rocketed 2% higher, but gave up half the gains by Friday’s close. The markets are clearly split between the weakness in the Old Economy stocks and the continued out-performance by the New Economy sector, (supported by a 5 month high in 52 week highs), which went to new highs on a relative strength basis. However, with Upside Volume at its worst reading since the top on October 2007, stocks should continue in corrective mode with good Fib support SPY 235.38. A rally should then be expected, followed by a dramatic weakening in the New Economy sector. An important low day is due May 9. The maximum decline, at this point, is SPY 227.
    Gold
    A mirror-image of stock performance was the gold market, which gapped down on Monday, but recovered by Friday for a net loss of $16 on the week to spot 1268. The gold cartel appears ever more desperate to keep gold under 1300 while the Dollar is showing weakness. Despite the sell-off, GLD recorded the 3rd consecutive Weekly close over our 89 line (120.15), closing 120.77. We were a week early calling for a gold share low, but with a 20 week high in volume, forming a Bullish Weekly Squat, a climactic low appears to be in place. Spot gold is $30 above its 55 week mvg avg, with our Daily Fast 89 line crossing over our Main 89 line, the first bullish crossover since Dec 5, 2016.
    Dollar
    The Dollar (UUP) gapped under out Daily 89 line. spending 5 days unable to recover. 
    Three (3) consecutive closes under the Weekly 89 line (24.60) and a bear market for the Dollar begins.


  • Stocks, Gold & Dollar Commentary April 24, 2017

    Stocks
    Stocks rose slightly last week, but a late sell-off was enough to generate a Bearish Weekly Squat, indicating lower prices as an immediate outcome. However, the surprising improvement in Market Breadth, along with the continued outperformance in the New Economy sector suggest the downside is limited to SPY 227 (approx 6%) at this point. Look for a SPY print of 233.05 to start the ball rolling to the downside. The immediate direction for stock prices will depend on the outcome of the French election on Sunday. An important cycle low is due on May 3 with 228.45 as an objective.
    Gold
    Paper selling by the gold cartel (Fed, BIS and bullion banks) to the tune of 45,000 futures contracts, in the space of minutes, on two separate occasions, barely made a dent in gold prices. When the dust settled by Friday’s close, the net loss was less than $3 on the week. Clearly there is a growing appetite for the physical, which will ultimately translate into much higher priced gold. Despite the gold suppression scheme, bullion recorded a 22 week high against the Dollar. The shares (XAU Index) generated a Bullish Weekly Squat and should see a good bounce after correcting about 5% in the last 5 days.
    Dollar
    The Dollar (UUP) fell to a 4 week low, holding our Daily 89 line. A strong close under UUP 25.74 will project UUP to 24.59 (Weekly 89 line). Three (3) consecutive closes under the Weekly 89 line and a bear market for the Dollar begins.


  • Stocks, Gold & Dollar Commentary April 17, 2017

    Stocks
    Although stocks fell sharply last week, with the steepest sell-off on Thursday, (in a holiday shortened week on extremely light volume) Market Breadth failed to keep up with the decline. The current correction should therefore be limited to about 6%, or SPY 227. Institutions continue to lighten portfolios, with a 6 week high in Big Block/Volume. In terms of duration, there’s likely another 4-5 weeks of choppy trading, before a SPY 227 print shows up. On the subsequent rally, we do not expect to see new highs. Instead, there should be a big fall-off in the outperformance in the New Economy sector, which is a necessary ingredient for a much steeper decline, to SPY 209.66, the general area that previously held resistance since December 2014.
    Gold
    Spot gold had a strong week, rising $32 to 1287, a 5 month high, clearly reinforcing its close above the 55 week mvg avg, (1236.44) and decisively closing above our Weekly 89 line. The next hurdle will be spot 1300 – 1325 (GLD 126.27) which will be met by the Cartel firing bazookas, in another last-ditch attempt to suppress price. However, we don’t rule out an attempt to first push gold back to its break-out point GLD 120.13 (spot 1262) before seeking higher levels. The XAU rallied to a 7 week high into Fib resistance 89.72, on very light volume, but showed weakness on Thursday despite the metals big day, closing 89.40. With the shares making a 7 week high compared to the metal, a pullback is likely. Fib resistance XAU 93.01 will prove formidable and may take several weeks to clear.
    Dollar
    With the Donald calling for a weaker Dollar, the Dollar (UUP) fell slightly to 25.97. UUP 26.08 – 26.23 proved formidable resistance in any case.(Actual high 26.16!). A sharp close under UUP 25.73 (Daily 89 line) will start the ball rolling to a bear market.


  • Stocks, Gold & Dollar Commentary April 10 2017

    Stocks
    Stocks had a surprisingly modest down week, despite the airstrike in Syria. Nothing has changed with SPY still likely to correct to the 227 – 226 level, (about 6%) before mounting a comeback. The New Economy sector started to show some kinks in the armor, failing to make relative strength new highs. Heavy institutional selling continued unabated, registering 4 week highs, while Upside Volume continued to lag. But with Market Breadth holding its own, and the New Economy not giving much ground, a wash-out in stocks is premature.
    Gold
    Spot gold traded to 1270 on Friday overnight, but an onslought of paper selling by the Cartel, within 30 minutes of the close, took spot gold down $15 and silver down 30 cents in a matter of minutes, while all other markets were moribund. However, with gold closing 1255, it’s now the third consecutive week having closed above its 55 week mvg avg. (1235.50) — a rule we follow for a convincing trend change. The gold shares bumped into resistance (87.41 – 89.42, actual high 88.19) but nevertheless have resumed leadership in the group, registering a 5 week high compared to the metal. The next level of Fib resistance for XAU 89.72 – 93.01 (strong). This will likely take several weeks to clear.
    Dollar
    The Dollar was strong gaining nearly 1%, on news of the airstrike in Syria, recording a 5 week closing high. However, it’s now approaching formidable resistance territory (UUP 26.23 – 26.41). A strong close under 25.72 will send the Dollar spiraling down into a bear market. This will coincide with gold closing over $1300.


  • Stocks, Gold & Dollar Commentary April 3, 2017

    Stocks
    With a cycle high day arriving on schedule, followed by a late sell-off on Friday, the market should undergo a modest correction with SPY 227 – 226 as a solid target. But with the unrelenting out-performance by the New Economy sector, — bringing about a modest improvement in Breadth —  stocks will have an extended life, with another likely challenge to new highs, at some point. We anticipate the maximum correction at this juncture to be 6%.
    Gold
    Bullion ended slightly higher on the week (1249.20), and for the second consecutive week closed above its 55 week mvg avg (1235.15). GLD Fib support 117.52 (spot 1237). We expect several more days of choppy, sideways trading. The shares led the group, which generated a bullish Weekly Squat. XAU targets 87.41 – 89.72.
    Dollar
    The Dollar (UUP) bounced 1% off the Daily 89 line approaching Fib resistance 26.08 (actual high 25.97). Max Fib resistance UUP 26.23. We expect a weak Dollar once gold resumes the bull market in earnest.


  • Stocks, Gold & Dollar Commentary March 27, 2017

    Stocks
    Stocks started their much awaited correction, falling 2.6% — about half their initial projected decline — before stabilizing around SPY 233. While Upside Volume, Momentum and Breadth continue to weaken, the resilience of the New Economy sector is out-performing the General Market by a wide margin, mitigating a more serious decline at this point. There will likely be a bounce to another cycle high day arriving around Mar 31/Apr 4, before another sell-off begins in earnest, with SPY 227 – 226 as a solid target.
    Gold
    Bullion continued to rise, closing above its 55 week mvg avg (1234.89) settling late Friday 1245. The XAU — on the lightest volume in months — struggled to break through resistance (85.71), closing with a minor gain (83.99) on the week. Continued sideways trading is the likely scenario in the very near term. Fib support GLD 117.25 (spot 1228), 116.63 (spot 1222 strong). As a currency, the metal in stealth-like fashion recorded a 5 month high when compared to the Dollar.
    Dollar
    After selling off sharply on Tuesday, the Dollar (UUP) held support UUP 25.70 for the balance of the week, recording a Daily Squat on Friday at our 89 line, which should propel the market higher in the near term. After the bounce runs out, expect UUP 24.94 as good target as gold resumes its bull market.


  • Stocks, Gold & Dollar Commentary March 20, 2017

    Stocks
    Although the General Market tacked on a miniscule gain to close out the week, stocks remain poised for a significant correction as their underpinnings show little improvement. With an important cycle high upon us, a correction of about 5%, to SPY 227 – 226, is imminent over the next 4 to 6 weeks. Mitigating against a deeper decline at this point is the resilience and outperformance of the New Economy sector. Once the rally off the low begins, we expect a weakening of the New Economy stocks as a prelude to a much bigger decline.
    Gold
    Physical spot gold staged a strong come-back rally, after coming close to our max spot projection (1294). Actual low 1297!! The gold shares led the advance in spectacular fashion to resume sector leadership, but stopped abruptly on Friday as the XAU reached strong Fib resistance 85.10 – 85.71 (actual high 85.53) closing 82.55. A minor consolidation is now likely, before the bull resumes. Spot bullion closed 1228.50, about $6 under its 55 week mvg avg.
    Dollar
    The Dollar dropped 1% with UUP closing 25.88, despite The Fed raising rates on Wednesday.