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  • Stocks, Gold & Dollar Commentary November 20, 2017

    Stocks
    Stocks had there most significant selloff in months, falling 1.6% from the high on Nov 7. With the New Economy stocks continuing to outperform the General Market it’s highly unlikely a correction on the magnitude greater than 5%, at this time is likely. With the market barely 1% from the highs, Breadth has faltered to extreme levels with new lows exceeding new highs on 2 days last week. For the Thanksgiving week — after some initial weakness — we will typically see a bounce-back rally as we approach the holiday season. SPY Fib support 250.45 – 248.22 (strong).
    Gold
    The metal closed $18 higher on the week (1293), after spending 21 days stuck in a $20 range — the tightest range in years. All the while — with the cartel hammering the paper market with millions of paper ounces sold — GLD held support at the Daily 89 line. Gold seems on a bonafide breakout, supported by the shares which now show 10 weeks of bullish Upside/Downside volume, as well as a classic Bullish Weekly Squat on the smallest Weekly range in memory. GLD Fib resistance 124.55 – 126.49. XAU Fib resistance 84.95.
    Dollar
    The Dollar was weak, falling close to Fib support UUP 24.28 – 24.17. Actual low UUP 24.32.


  • Stocks, Gold & Dollar Commentary November 13, 2017

    Stocks
    A minor setback for stocks last week, with continued outperformance by the New Economy stocks, which continue to mask the continued deterioration in the overall market, as evidenced by 9 week lows in 52 week highs and 12 week highs in 52 week lows. – the combination rarely seen before. In addition our Upside/Downside volume studies have weakened for 7 consecutive weeks, along with Triple Bearish Momentum divergences. When the break finally comes it will be huge. SPY Fib support 250.45 – 248.22 (strong).
    Gold
    Bullion had a positive minor upweek, (1274.90) but the real story was positive Upside/Downside volume on the shares, and another Bullish Weekly Squat, despite the flat close on the week. XAU Fib resistance 85.33 – 88.58 (strong). 55 week mvg avg 1252.48.
    Dollar
    The Dollar (UUP) failed on its 3rd Weekly close (24.54) over the 89 line, and thus has not mitigated its bearish posture. A pullback to UUP 24.28 – 24.17 is likely before another attempt to clear the Weekly line.


  • Stocks, Gold & Dollar Commentary November 6, 2017

    Stocks
    After two minor pullbacks during the week, stocks closed at fresh all-time closing highs, on the strength of positive spin on the tax reform proposal out of Congress. This should prove short-lived, as significant deterioration in Upside/Downside volume has now persisted for 6 consecutive weeks, along with triple Bearish Momentum divergences, and just missing 10 week highs in 52 week lows. Holding the market up is the extraordinary persistent strength in the large New Economy stocks, (evidenced by APPL’s introduction of the new I phone X) which continue to make new highs relative to the large Old Economy stocks. However, the market deterioration is simply too great for this disparity to continue much longer. We’ve been wrong before, so we’ll just have to wait and see. SPY Fib support 249.55, 247.17 (strong).
    Gold
    Spot gold registered a 13 week closing low (1269.80) on Friday, but this is about to change. A major cycle low is due. In addition, with the XAU falling 1% last week, surprisingly, bullish Upside/Downside volume continued for the 3rd consecutive week. on a Bullish Weekly Squat. It’s now time for the shares to lead the precious metals higher, after recording a 5 month low relative to the metal. For 18 consecutive weeks price has been above the 55 week mvg avg (1252.86). GLD Fib resistance 124.55 (1310 spot).
    Dollar
    After bottoming 9 weeks ago, the Dollar (UUP) has closed for the 2nd consecutive week above its Weekly 89 line (24.56). One more successful weekly close, and for the time being, the Dollar will be given a reprieve from a bear market.


  • Stocks, Gold & Dollar Commentary October 30, 2017

    Stocks
    A severe (1%) mid-week drop in stocks, was abruptly aborted as a flood of “good news” supported the continuing rally to new highs, with the New Economy stocks exploding on Friday, behind the headline of 3% GDP growth in the economy. All this behind continuing deterioration in Upside/Downside volume, and a surprising 9 week high in 52 week lows. A cycle high is due on Monday, so we expect a modest pullback, as the market goes through another one of its small corrections. SPY Fib support 249.45, 247.21 (strong).
    Gold
    We were early on our call for a gold rally, as interest in the PM’s disappeared with good economic and political news (tax cuts) dominating the news. However, for the 2nd consecutive week, Upside/Downside volume on the XAU gold stocks was bullish, along with a Bullish Weekly Squat, on a 7 week high in volume, signifying capitulation by week holders. The metal ended the week 1273, still above its 55 week mvg avg 1251.73. 
    Dollar
    With the Euro taking up the largest percentage of the Dollar Index, the Draghi announcement of virtual unending QE, sparked a Dollar rally, catapulting the UUP to 24.67, and the first Weekly close over 24.58. Two more weekly closes over 24.58 will turn the Dollar bullish.


  • Stocks, Gold & Dollar Commentary October 23, 2017

    Stocks
    The Senate’s passing of a 2018 budget during the midnight hours on Thursday touched off an overnight stock rally that carried over until Friday, with SPY breaking our Fib 610 line (255.99), reaching 257.14. This came after the biggest single day break in 1 1/2 months. Upside/Downside volume remains puny and does not support the rally. Despite higher stock prices there lurks a 7 week high in 52 week lows. With robo machines accounting for the bulk of market gains, a severe drop on any disappointing news can happen at any time. SPY Fib support 250.24, 248.37 (strong).
    Gold
    With the focus on stocks, gold continued its base-building with a $20 drop closing the week 1282. A bullish Squat on a 9 day low suggests a strong bounce from these levels. Further supported by the gold shares which had the first bullish Upside/Downside volume week in 10 weeks. We’re still looking for an XAU strong close over 87.38, for a spike move to 105.49. 1700 remains an intermediate term target for spot gold.
    Dollar
    The Dollar remained firm as Trump interviewed candidates for Fed Chairman. It will take 3 consecutive Weekly closes over UUP 24.58 to change the current bearish outlook to bullish.


  • Stocks, Gold & Dollar Commentary October 16, 2017

    Stocks
    For the second straight week, volume has lagged prices, setting up the second classic Bearish Squat in four weeks – only this time Upside/Downside volume has also turned bearish. Momentum has turned negative along with weakening Breadth. The bright spot: The New Economy continues to outpace the Old Economy. For this reason we see only a fairly modest sell-off before another attempt at new highs with the SPY attempting to touch our 610 Fib line at 255.99. Fib support 249.44, 247.86 (strong), 245.90 (strong).
    Gold
    Bullion rose a strong $27 for the week closing 1303, as the bull market gets back underway, (after a week more of continued sideways trading). We’re still looking for an XAU strong close over 87.38, for a spike move to 105.49. 1700 remains an intermediate term target for spot gold.
    Dollar
    With the Trump administration looking for better trade deals, the Dollar will remain entrenched in a bear market.
    It will take 3 consecutive Weekly closes over UUP 24.58 to right itself to bullish.


  • Stocks, Gold & Dollar Commentary October 9, 2017

    Stocks
    Stocks continued straight up, making new highs each day, on the lightest volume over the past four (4) weeks. It’s likely SPY will touch 256 before ready for the next major correction. Volume is not keeping pace with the price gains, by a long shot, which should result in SPY targets 249.19 – 247.70 (strong) being met at some point in time. With SPY ready to make contact with our 610 Fib line (SPY 256.16) for the first time in 6 months, sideways to down action is the like scenario over the next few weeks.
    Gold
    Relentless paper selling took spot gold to a 1260 low on Friday, before a strong rally bringing spot to a respectable 1276 close. With the XAU rallying nearly 3% on the week (in the midst of metal weakness) it appears the PM’s have essentially completed their correction, and are now ready to restart the bull. An XAU strong close over 87.36 should get the market running to 105.49. The shares have reclaimed market leadership over the metal with a 5 week high vs bullion.
    Dollar
    With the distinct possibility of a “hawk” being appointed by Trump to lead the Federal Reserve, the Dollar (UUP), rallied to a 12 week high.


  • Stocks, Gold & Dollar Commentary October 2, 2017

    Stocks
    The modest decline we had forecast off a classic Bearish Weekly Squat barely got going with a SPY low 248.08, only to be arrested on Trump’s tax cut proposal, signaling the robotraders to take over and drive stocks to new all time highs (SPY 251.32) to close out the week. This classic Squat will need to be satisfied once the euphoria of this brave new world wears off.
    For the time being we expect continued, tight range, choppy trading. Solid Fib support SPY 247.74.
    Gold
    The metal sank an additional $17 to close the week 1280, upsetting our forecast for a good low and the start of strong rally. The XAU followed suit in sympathy with the weak gold price, closing Friday 84.66, and the first Daily closing price under the 89 line (84.94). Look for 83.66 to find good XAU Fib support. The bull market in the shares will not continue in earnest until a strong Weekly close over XAU 87.38. The metal remains solidly above its 55 week mvg avg (1249.35).
    Dollar
    For the time being the Dollar arrested its decline, with a bounce to UUP 24.18, on the strength of higher interest rates, and a quickening of inflationary expectations. 
    It will take (3) consecutive closes over UUP 24.59 to turn the Dollar bullish. Fib support UUP 23.33.


  • Stocks, Gold & Dollar Commentary September 25, 2017

    Stocks
    For 5 days stocks tacked on a miniscule gain with SPY barely exceeding a 1 point range. The net result was another Bearish Weekly Squat — this time a classic — the strongest in 5 months. The main takeaways for the week was a sharp drop-off in the New Economy sector vs the Old Economy, an overall weakening in Bullish momentum and Market Breadth. This does not mean a huge sell-off from here. But rather an initial modest decline to SPY 245.98 – 243.65 maximum, followed by a bounce to challenge the highs, which should set-up for a bigger top. Ultimately major Fib support comes in at 240.85.
    Gold
    On the threat of higher interest rates, as the Fed contemplates shedding bonds from its balance sheet, weak holders bailed out of paper gold, driving spot to 1293, exceeding our maximum downside by only $10. Spot closed Friday 1297, and is now ready to resume the bull market. The XAU fell to the Daily 89 line (84.88) and ended the week 86.06, with the Fast 89 line remaining above the Slow 89 line (life cross) for the 9th consecutive week, and likely to remain in this bullish configuration going forward. Look for an XAU Weekly close over 87.38 to get index moving substantially higher.
    Dollar
    Despite a slight bounce for the week (UUP 23.92), the Dollar remains mired in a bear market that is just beginning. It will take (3) consecutive closes over UUP 24.59 to turn the Dollar bullish. Fib support UUP 23.33.


  • Stocks, Gold & Dollar Commentary September 18, 2017

    Stocks
    From the get-go stocks rallied to new highs each day last week, but the total gain from the high last reached on Aug. 7 was less than 1%. While our technicals have now turned mostly positive to neutral, a powerful Bearish Weekly Squat on top of 3 Daily Bearish Squats strongly suggest a correction should take place with downside targets SPY 246.90 with a maximum 243.65. Several weeks of trading are needed before any semblance of a final top can, once again, take place.
    Gold
    As we suggested, gold was ready to correct into Fib support, falling $27 to close Friday 1319. With spot falling so sharply in one week, there is likely some additional downside, with a maximum 1303 spot. However, once the correction is out of the way, the bull market will continue in earnest with a major target of 1700 within 6-9 months. The gold shares had their 3rd consecutive Weekly close over the 89 line. Some additional downside pressure is likely with XAU 86.97 as important Fib support. The taking out of 93.32 will see a fast run to 105.49 (strong).
    Dollar
    The Dollar (UUP) had a meaningless bounce (23.84) but remains entrenched in a bear market, with the 1st close under the Monthly 89 line. Good Fib support 23.32.