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  • Stocks, Gold & Dollar Commentary November 12, 2018

    Stocks
    A strong eight day bounce sent stocks rallying 8% off the low (SPY 259.85) to 281.22, but netting just 2.2% on the week (277.76). Three important takeaways: A nine month high in Daily bullish momentum was recorded, meaning time is now needed to work off the bullish momentum, while, at the same time, a 10 month low was registered when comparing the New Economy sector vs the Old Economy. Clearly, New Economy leadership is all but gone. Finally, with a decline of about 6% in Weekly Volume, volume failed to keep up with price appreciation, bringing our Upside/Downside Volume study into negative territory, once again. With the first cycle top coming on schedule (November 7), a more conclusive high is due around November 23, which fits with our volatile, choppy sideways trading scenario over the next few weeks.
    Gold
    While most stock markets were in disarray, the gold cartel made certain gold and silver were not considered “safe havens”, as paper selling pushed the metal below 1220 support, to a 1206 low, settling 1209. This was accomplished with the the COMEX Gold Deliverable Ratio at the 2nd all-time highest — 358 claims for every ounce available for delivery. (meridianmacro.com) The shares (XAU) fell 4.5% on 20% less volume, as our Upside/Downside Volume studies strengthened. Bullish Momentum divergences are falling into place. We anticipate another 1-2 weeks of sideways trading before an Upside breakout. This should coincide with a break in stocks.
    Dollar
    After a weak opening, the Dollar (UUP) closed slightly higher (25.83) on the way the major Fib resistance UUP 26.04.
     

  • Stocks, Gold & Dollar Commentary November 5, 2018

    Stocks
    Stocks made new lows (SPY 259.85) to start the week, then proceeded to rally 3% off the low, finally settling 271.89, up 2%. The market is going through the time consuming process of “filling out” the right shoulder, of a massive H&S top, going back to Feb 9. For the weeks trading, there was an improvement in Upside Volume, which leads us to conclude that several more weeks of volatile, sideways trading with an upside bias is the likely scenario. An important high is due around November 23. SPY Fib resistance 277.98 – 282.71 (strong).
    Gold
    The gold cartel, with timely, massive paper selling drove the metal by mid-week to spot 1211.50 — but failed to keep it under 1220 — finally settling 1232.50, virtually unchanged from the prior week. To put the amount of market manipulation in perspective, in the past 10 years while the cartel was unleashing millions of paper contracts to set the price under the physical market, China and India have accumulated 29,000 tonnes of gold, the total mine production for that period (www.goldchartsus.com). At some point this manipulation will not work, as Mother Nature can’t be fooled forever. The gold shares (XAU) resumed leadership, recording a 3 week high vs the metal, on a 9 month high in Upside Volume. A break over 82.58 will project the shares to Fib resistance 102.62.
    Dollar
    As long rates gapped to the highest level since March 2017, the Dollar managed a small gain (UUP 25.71) on the way to major overhead Fib resistance 26.04. Strong Fib support UUP 24.69.

  • Stocks, Gold & Dollar Commentary October 29, 2018

    Stocks
    Stocks were hit hard, falling 5%, (the full decline from the high is 11%), but recovered some ground at Friday’s close, after reaching the base of the right shoulder in, what will be seen, as a massive H&S top formation, going back to the February 9 low. SPY came within one point (262.29) of touching Weekly Fib support 261.25. The right shoulder now needs some filling. With the 2nd highest volume in 18 weeks, the sell-off appears climactic. Remarkably, while the FAANG stocks were mostly brutalized, The New Economy sector as a whole showed relative strength when compared to the Old Economy, recording a 2 week high. A period of 2 to 5 weeks of choppy, volatile, sideways trading with an upside bias is the likely scenario over the next month, with high days due, on or around November 6 and 23. SPY Fib resistance targets 278.88 – 283.20.
    Gold
    The yellow metal was firm, after testing 1220 support, then bouncing as high as 1243, finally settling 1233. The Bearish Weekly Squat badly damaged the shares, with XAU falling 7.0% (65.17), on a multi-month high in volume, as weak holders bailed out. We’ll look for a Bullish Weekly Squat around Major Fib support 62.95 to start next rally for an eventual break-out through 82.76.
    Dollar
    The Dollar traded to a 6 month high (UUP 25.75) as a Bearish Weekly Squat formed, indicating the Dollar should weaken in the near-term. Strong Fib support 24.64. Strong Fib resistance 26.04.

  • Stocks, Gold & Dollar Commentary October 22 2018

    Stocks
    Coming off the onslaught of the prior week, stocks bounced 2%, then fell-back to close virtually unchanged. Our studies remain solidly bearish, with Leadership being the most notable, as The New Economy sector fell to 6 month lows vs the Old Economy. While SPY may break under the recent low (270.36), and find Fib Weekly support 267.79 – 261.25, a few more weeks are likely needed for the right shoulder, of a massive H&S top, to be filled. Fib resistance 283.32 – 286.63. An important cycle high is due on, or around, November 3.
    Gold
    Despite a 10 week closing high in the Dollar, gold managed to overcome cartel paper selling, and close 1226.50. This week is critical to see if spot can hold the 1220 level, which may be tested. The shares (XAU) managed a 9 week high, but with a bearish Weekly Squat formed, a pullback into Fib support (67.56-66.44) is possible before moving higher. XAU 83.69 is the key level for a major break-out in the shares.
    Dollar
    The Dollar, once again, tested Fib resistance 25.53, and closed at a 10 week closing high (25.46). Strong Fib resistance 26.04.

  • Stocks, Gold & Dollar Commentary October 15, 2018

    Stocks
    The General Market fell nearly 8% last week, as a heavy dose of Downside Volume finally hit stocks, further intensifying our bearish Downside Volume numbers. In panic selling, SPY broke strong Weekly Support (273.36), bouncing Friday to close 275.96. A bounce is now likely over the next 3 weeks for SPY to reach a maximum comeback 286.63, with an important cycle high due on, or around, Nov. 3. With our studies (Volume, Momentum, Leadership & Breadth) now solidly bearish, we expect the downturn to continue, once the rally terminates.
    Gold
    The metal rallied $14 closing 1217.50, but failing the 1220 level on Friday. Spot needs to clear 1220 for a move to 1245 and 1310. The star for the PM’s were the gold shares (XAU) rallying 6%, confirmed by a 9 month high in volume. The key level XAU needs to clear falls to 83.81, with target 102.62 Fib resistance.
    Dollar
    The Dollar (UUP) hit Fib resistance 25.53 (actual high 25.54) then fell 1%, before closing Friday 25.33, Strong Fib resistance 26.04. Fib support 24.68 – 24.32 (strong).

  • Stocks, Gold & Dollar Commentary October 8, 2018

    Stocks
    Stocks fell 2% after racing to new highs. Despite new highs, Breadth continued to deteriorate as nearly 7 times new 52 week lows were recorded vs new highs, indicating broad weakness in small caps. The New Economy sector fell to a 5 month low when compared to the Old Economy. While Downside volume was prevalent 3 out of 5 days, the “heavy dose” we were looking for never showed up, indicating the topping process will likely take longer. A SPY correction to 273.36 (7%), is strong Weekly Fib support, and should be followed by a failed rally. Nearer Fib support 278.35.
    Gold
    After 8 weeks of heavy cartel paper selling, (with the low of 1167 set 8 weeks ago), spot gold closed Friday above the important 1200 level. (1203.50). The metal must now clear 1220 for a move to 1245 and 1310. The XAU continued to inch higher (65.49) with the first positive momentum week after 15 negatives (5 week rate of change).
    The shares have re-established leadership showing a 6 week high when compared to bullion. The key level for the XAU that needs clearing is 84, for the bull market to be established in earnest.
    Dollar
    Sharply higher interest rates, propelled the Dollar (UUP) to approach Fib resistance 25.53. (Actual high 25.48). Strong Fib resistance 26.04. Fib support 24.60 – 24.32 (strong).

  • Stocks, Gold & Dollar Commentary October 1, 2018

    Stocks
    As in recent typical fashion, stocks showed early weakness, only to recover, in the face of the Fed raising interest rates, and end the week with less than a 1% decline. Masking this relative stability was a continued slowdown in Momentum, which has now developed quadruple divergences — that has now turned negative — as the “elevator” has definitely slowed. Even with stocks within striking distance of new highs, Breadth has turned negative in the almost doubling of 52 week lows compared to highs, while Upside/Downside volume has given off a single bearish reading. The upshot: We’re still waiting for a heavy dose of Downside Volume, as October begins, to be followed by a failed rally over the next 4 weeks. Downside SPY targets 278.35 – 273.94.
    Gold
    The metal started the week higher in Asian trading, which turned out to be the high for the week (1203.70), followed by cartel paper selling, desperate to keep gold under 1200 (spot low 1180.60) but ending Friday on a strong bounce (1192). Multi-week bullish Upside/Downside Volume on the shares strongly indicates the metal is ready to move higher, with the spot low (1167) having been made 7 weeks ago. Silver showed relative strength, gapping up 40 cents Friday to a 4 week high (spot 14.64). The 55 week mvg avg for spot gold 1263.52.
    Dollar
    On higher interest rates the Dollar (UUP) bounced to a 3 week high (25.26). Fib resistance 25.53 – 26.04 (strong). Fib support 24.60 – 24.32 (strong).

  • Stocks, Gold & Dollar Commentary September 24, 2018

    Stocks
    After an opening downdraft to start the week, stocks, once again, in stealth-like fashion — on minimal volatility –tacked on another 1% in the safe haven of the biggest NYSE stocks, by Friday, – but could not revive the New Economy sector, which fell to a 5 month low when compared to the Old Economy. Our critical Upside/Downside volume numbers returned to a neutral reading, which means a series of heavy Downside Volume days are critical before we a top can be contemplated. The last 2 Bearish Weekly Squats remain unsatisfied, and were followed last week by a third, on a 13 week high on volume, so this one should produce a decent correction. Downside SPY targets are 278.35 – 273.94, which should be followed by a strong bounce. An October top is still anticipated.
    Gold
    When it appeared that gold had decisively cleared 1200, the cartel puked out 10,000 futures contracts early Friday (worth $1.2B) in 1 minute, driving the paper price to 1191 from 1211 overnight. A steady recovery brought the metal to 1199 by Friday’s close. The shares (XAU) outperformed the metal gaining 4.2% on the week (66.03), on a 4 week high on volume, generating a Bullish Weekly Squat. Fib resistance 77.05. The 55 week mvg avg for the metal 1264.86.
    Dollar
    Declining 5 out of last 6 weeks, the greenback fell less than 1%, (UUP 24.99) on the way to Fib support 24.60 – 24.32 (strong).

  • Stocks,Gold & Dollar Commentary September 17, 2018

    Stocks
    In muted, but relentless fashion, stocks tacked on another 1% gain, closing at all time highs (SPY 290.88). Nothing has really changed. Our Upside/Downside volume numbers remain bearish, Quadruple Bearish Momentum divergences are in play, while Leadership continues to lag, with only a small gain in the New Economy sector vs the Old Economy. It’s only a matter of time before the market gives back the recent gains. Our downside targets remain SPY 278.24 – 275.17, which should be followed by a strong bounce into an October top.
    Gold
    Bullion rallied $17 at its high for the week (1213) but gave it back on non-stop cartel paper selling, in a desperate attempt to keep the metal under 1200, closing 1194.85. After 13 weeks of negative momentum, the XAU bounced from the 62 level to 65.15, settling 63.36, a small advance for the week. We believe the low is in for both metal (spot 1167) and shares, (XAU 60.59) but sideways base-building is likely for several more weeks. A Weekly close over spot 1266.09 will turn the 55 week mvg avg bullish.
    Dollar
    The greenback fell to a 6 week closing low (UUP 25.18). Fib support 24.60 – 24.32 (strong). Strong Fib resistance 26.04.

  • Stocks, Gold & Dollar Commentary September 10, 2018

    Stocks
    Stocks fell only 1.25% last week, but our technicals worsened. Significantly, our Upside/Downside volume numbers finally generated Bearish divergences, along with weak Breadth and importantly, a massive deterioration in the New Economy sector, which registered a 5 month low vs the Old Economy. At this point, this seems only enough deterioration to produce a maximum 5% decline off the highs, which gives us SPY targets of 278.24 – 275.17. Vigorous rallies can be expected off these levels, taking the market to a major October top.
    Gold
    For the second week gold declined $5 (1196.10) after ranging 1206.50 – 1189.50. Gold shares continued to disappoint, falling 4.8% to XAU 63.04. Maximum downside is 54.70, although a short term bottom around 62 is likely, with good rallies from this level, several weeks are still needed for a sustained rally and final low. Important XAU Fib resistance 76.97. Spot gold 55 week mvg avg 1267.41.
    Dollar
    The Dollar was slightly higher by weeks-end (UUP 25.28). Fib support 24.60 – 24.32 (strong). Strong Fib resistance 26.04.