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  • Stocks, Gold & Dollar Commentary November 25, 2019

    Stocks
    The big takeaway: An important first sign, we’ve been waiting for, of an impending top emerged last week, as the New Economy stocks registered 8 day lows vs the Old Economy in closing out the weeks trading. Breadth continued to deteriorate, as NYSE 52 week highs fell to 4 month lows, with the difference between highs/lows a miniscule 15 stocks.  With volume continuing weak through the entire 6 week rally, our Upside/Downside numbers fell to their worst levels, with bullish momentum finally turning negative. A modest decline is likely, followed by a bounce into the Thanksgiving holiday, to be followed by a major high around December 2/4. Initial SPY Fib support 308.65. Strong Fib support 301.88. Fib resistance 313.10.
    Gold
    After a spot gold high of 1557.70 on September 4, gold has gone through a 3 month consolidation, and is setting up for a final decline in early December, for its typical 6 month low.The most recent spot low of 1444.90 may be tested. If broken, downside targets 1435 with max 1419 (low probability) on all out paper raid wash-out. With gold leading the downside, SLV target 15.37. We expect silver to lead rally. The silver miners (SIL) show a strong bullish divergence when compared to the metal. From there a multi-week rally should start until end of January with 1670 spot objective. GLD resistance 141.96, GDX resistance 28.87, SLV resistance 17.76, GDXJ resistance 40.98, SIL resistance 30.87. Spot gold 55 week mvg avg 1342.17.
    Dollar
    In an abrupt about-face, the greenback bounced back to recent high (UUP 26.92), closing on the highs. UUP resistance 27.00. A Weekly close under 26.68 turns our 89 line trends lower, with 26.30 objective.

  • Stocks, Gold & Dollar Commentary November 18, 2019

    Stocks
    The pending trade deal is the gift that keeps on giving, as stocks continue to set new all-time highs, (both Old and New Economy) all the while complacency is at 5 year lows. The VIX touched 12. SPY reached its big target 311 (actual high 311.84) while cross currents rage on. Consider this takeaway: While stocks are making new highs, 3 month highs were made in new 52 week lows. Stocks are now up 5 weeks in a row, with prices far out-running volume (3 week lows maintaining bearish Upside/Downside volume) precisely when the Fed hosed in $250 billion in fresh liquidity, against an economic back-drop of near recession levels in Europe, and falling GDP in China and the US. We expect a trading high next week, with only a minor sell-off, (2-4%) until the New Economy stocks break down. Initial SPY Fib support 306.71, then 303.85.
    Gold
    After the biggest sell-off in years, the metal made 15 week lows (spot 1444.90) and closed the GLD gap from August 2, then rallying to Friday’s close 1468.30, an upside reversal, closing over the midpoint of the Weekly range (spot 1444.90-1475.50). The gold shares (XAU) led the group, tacking on 2%. GLD, GDX and SLV came close to their respective Fib support levels 135.89, 25.65 and 15.38 before closing higher on the week. For clear breakouts look for GLD Weekly close over 141.96, GDX Weekly close over 27.90, SLV Weekly close over 16.80. Yet to be met spot gold price objective 1670, which will mean a potential spot silver 26.59 on a gold/silver ratio falling to the mid 60′s.
    Dollar
    The greenback weakened Friday (UUP close 26.80) after holding firm for 3 days at 26.92. A Weekly close under UUP 26.67 will turn Dollar trends bearish, looking for 26.30 and eventually 25.81.

  • Stocks, Gold & Dollar Commentary November 11, 2019

    Stocks
    With daily leaks of a successful Phase 1 in the China/US trade deal saga, stocks tacked on another 1% gain, with SPY reaching for its big target of 311 (actual high 309.65) amid negative crosscurrents of rapidly weakening Breadth, a classic Bearish Weekly Squat on 8 month low in range vs positive all time highs in both the New Economy and Old Economy sectors, with the New Economy leading, juiced by $250 billion in new liquidity in the past 8 weeks. This smacks of desperation by the Fed, despite a still growing economy of 2%. We still believe there will be no major sell-off in stocks until we see the start of a clear breakdown in the New Economy sector. Until then, expect only minor pullbacks of the “run-of-the mill” 2-4% variety.
    Gold
    The precious metals had the biggest sell-off in years, (gold down $56) after struggling for the past 3 weeks to take out spot 1521 (breakout level for next bull run) stalling at 1516.50, 1518.70 and 1516.70 over the course of 6 weeks (in retrospect a “3 drives to a top” sell, finally succumbing under a blitz of paper against the backdrop of a possible successful China/US trade deal. A strong Dollar (up 1%) contributed to the bearish sentiment. Silver faired even worse, dropping 7% (SLV 15.70). Strong Fib support GLD 135.89, GDX 25.65, SLV 15.38. The bull market in the PM’s is by no means over, and the next move up will likely coincide with a stock market top.
    Dollar
    A strong week for the greenback. The UUP promptly reversed, after closing under our 89 line trendlines, and rallied 1.2% to overhead resistance (UUP 26.89) closing 26.90. Maximum upside is 27.04. Range trading for 2-3 weeks between 27.04 and 26.54 is the likely scenario.
     

  • Stocks, Gold & Dollar Commentary November 4, 2019

    Stocks
    Stocks had the wind at its back. The week started with rumors of a successful trade deal with China, in anticipation of a rate cut by the Fed, and ended with a better than expected jobs number, to propel stocks through our projected “3 drives to a top” bearish formation SPY 302.63, and end the week at new all time highs (306.14) — both for the New as well as the Old Economy sectors. While our technicals remain solidly bearish, (in addition back-to-back Bearish Weekly Squats) only “run-of-the-mill” corrections can take place, as long as the New Economy sector continues to out-perform the Old Economy. The maximum upside target is SPY 311. Maximum downside between now and year-end looks like 295 — unless the New Economy were to break down badly.
    Gold
    The metal had an extremely volatile week, with a $62 range, (low 1480.60) ending near the high (1514.50), but came in second to the shares (XAU) which closed on the highs (95.94 up 2.6% and 9 week closing high). The break-out level for spot gold is 1521, which should start the bull move to 1670. Spot silver had a small gain to close out the week, after spending most of the week in negative territory. We expect silver to lead the metals higher, and to keep shrinking the gold/silver ratio, in the intermediate term, to the mid 60′s. Spot silver has the potential to print 26.59 as gold hits its objective. In the near term GLD resistance 143.91, GDX resistance 28.87, SLV resistance 17.76.
    Dollar
    The greenback attempted to rally, but the Fed rate cut doomed the rally and closed under our merged trendlines (UUP 26.63) to close out the week, (UUP 26.58) and is headed to Fib support 26.30, and eventually 25.81 (strong).

  • Stocks, Gold & Dollar Commentary October 28, 2019

    Stocks
    With new all-time highs in the New Economy sector, (and, also when compared to the Old Economy) as a very mixed earnings picture pour in, the most the bears can expect is normal corrective action over the next couple of weeks, as stocks work toward an immediate high, based on a “3 drives to a top” (SPY 302.63) bearish formation. The algos were in control last week, gaining 1.5%, though muted, on the lightest volume in nearly a year, coupled with the smallest range in 5 months, creating a classic Bearish Weekly Squat. Bullish Momentum has been degraded sufficiently for a decent correction to take place. Upside/Downside Volume and Breadth remain bearish. SPY Fib support 297.97. A Weekly close under 294.07 will turn our 89 line trends bearish.
    Gold
    After trading down to 1481 to start the week, the metal came back surprisingly strong on Friday, to rally to 1518.70 (on generally weak economic news) shy of our 1521 breakout level, settling 1504.50. The shares followed through on back-to-back Bullish Weekly Squats, continuing to lead the metal, gaining 3.3%, on a 3 week high on trading volume. With Upside/Downside Volume hitting 8 week highs, a pause in the bull move is likely. Spot silver gained 3.0%, outpacing the yellow metal. GLD resistance 143.91. GDX resistance 28.87. SLV resistance 17.76. Spot gold intermediate term price objective remains 1670, with silver touching 26.59, as the gold/silver ratio drops to the mid 60′s.
    Dollar
    After hitting our downside target UUP 26.55 (actual low 26.54) the greenback bounced to 26.75 by Friday. Sideways, choppy trading with an upside bias is expected, with a maximum UUP 26.89 over the next few weeks. Look for an eventual close under 26.55, for a drop to strong Fib support UUP 25.81.

  • Stocks, Golds & Dollar Commentary October 21, 2019

    Stocks
    Crosscurrents gripped stocks last week on the lightest volume in 3 months. The net result was a fractional gain or loss depending on the index. A new high in daily Bullish Momentum, as well as new highs in the New Economy sector means more sideways chopping action is needed for the bullishness to be degraded. On the other hand, our Upside/Downside Volume studies along with Market Breadth maintained strong bearish readings. In the short term expect the market to move lower, primarily based on the failure of the British Parliament to approve the Brexit agreement, instead seeking an extension. This should roil the market in the early going. Fib support should show up SPY 295.38 – 293.36. A Weekly close under SPY 293.30 will turn our 89 line trends bearish, with the market seeking strong Fib support 287.10. Not surprising, with all the crosscurrents, the cycles inverted with the low day becoming the High Day on Oct. 17. Low Day expected Oct. 25/28. Longer term we expect to see SPY 265 – 263, but only after a breakdown in the New Economy sector.
    Gold
    The metal spent most of the week on the downside, with the narrowest range in 9 weeks, but managed an up-close by weeks-end (spot 1490). The main takeaway, however, was the reclaiming of leadership by the shares, with XAU gaining 2% (90.53). Coming off back-to-back Bullish Weekly Squats, and with Bullish Weekly Upside/Downside Volume numbers, along with Bullish Momentum divergences, the stocks are primed to move higher. GDX resistance 28.87, 30.00. GLD resistance 143.91. SLV resistance 16.86. Spot gold needs a 1521 print to continue its bull move. Intermediate term target for spot gold is 1670. Silver is ready to out-perform gold, and with the gold/silver ratio dropping into the mid 60′s, expect spot silver to touch 26.59.
    Dollar
    Considering the recent 4 month Dollar rally, last weeks drop – creating a 2-month island – was ominous though only down 1% for the week, hitting our downside target. (UUP 26.55). Strong Fib support 26.29.

  • Stocks, Gold & Dollar Commentary October 14, 2019

    Stocks
    To start the week, stocks broke badly on rumors of a cancellation of trade talks, then reversed with unprecedented volatility (on news the meeting would take place) to gap over our 89 line trendlines, reaching major Fib resistance (298.74), then falling sharply in the last 40 minutes to close on the lows for the day (296.28). The upshot of the meeting: In return for some modest concessions, most of which were previously offered by Xi, (buying large amounts of US agriculture), Trump agreed to suspend tariffs scheduled to start next week. The markets overall net gain: less than 3/4 of 1% for the week. With new highs in the New Economy sector, (YOY buybacks +39%, most since 2000*) led by Tech buybacks) vs the Old Economy, we continue to believe only relatively modest sell-offs in the near term are the likely scenario. Stocks should find Fib support SPY 292.09, with a low day expected Oct. 17. However, with our Upside/Downside studies remaining bearish, and Bearish Momentum divergences completing its set-up, a break under our trendlines should follow, with Fib support at SPY 287.10. Sometime in 2020, we expect to see 265 – 263.
    *Bank of America, Jill Carey 
    Gold
    In keeping with our scenario for more choppy trading, the metal started the week under pressure, with a spot low print 1488.20 on Tuesday, rallying to 1516.50 by Thursday, then under a barrage of paper selling during US/China negotiations, fell sharply to 1473, before closing Friday 1489. A spot gold print 1521 will constitute a break-out. The shares were weaker compared to bullion, but registered back-to-back Bullish Weekly Squats in a fake-out week (higher high, lower close). With GDX trading into our 89 line trendlines, we expect a strong bounce with our Weekly Upside/Downside volumes turning bullish. With more time left for sideways trading still likely, we’re allowing for an alternate scenario for GDX of additional downside. GDX Fib support 25.51 (strong). GDX resistance 28.87, 30.00. GLD resistance 143.91. Silver is outperforming gold, and should continue to do so when the metals start the next bull phase. With a spot gold target of 1670, spot silver should trade 25.69, as the gold/silver ratio shrinks to 65. SLV near term resistance 16.86, 17.79.
    Dollar
    The greenback broke the enormous rising wedge formation, (UUP 26.85), its been holding since June 25, closing 26.82. Initial downside target 26.59 – 26.54. A Weekly close under 26.54 turns 89 line trends lower, with strong Fib support 26.29.

  • Stocks, Gold & Dollar Commentary October 7, 2019

    Stocks
    Stocks had a wild week, collapsing 4.6% from the Tuesday high to the low on Thursday, (gapping under, and then back over, our two 89 line trendlines) staging an impressive rally to end the week just slightly lower for the 5 days. (SPY 294.35).  The big takeaway: Despite the New Economy sector recording an 18 day low against the Old Economy sector one week earlier, the New Economy stocks bounced back, and registered all-time highs on Friday, when comparing the two sectors. For this reason, a market crash is ruled out at this time, and we should only expect a fairly modest correction, as we head to any potential low (max SPY 263.77) into next year, as the trade war plays out, and the election season heats up. Just ahead SPY Fib resistance 295.68, 297.42.
    Gold
    The metal crashed to a major low on Tuesday (spot gold 1458.60) then traded up to 1515 on Friday, on news of a rapidly softening economy and tepid jobs report, closing the week 1504. The XAU made a 9 week low, on a 10 week low in range, generating a Bullish Weekly Squat, which should take the market higher (but not new highs just yet). Bullish Momentum divergences needs to form, and another 3 weeks of choppy sideways trading is the preferred scenario, with a high day expected October 16/18. Spot target for gold remains 1670. GLD res 143.91, GDX res 28.87, GDXJ res 40.98, SLV res 16.86, SIL res 30.88.
    Dollar
    The greenback made a stab at our max projected high UUP 27.16. Actual high 27.17, then fell to close 26.96. A 26.85 print breaks an enormous rising wedge formation with an initial target UUP 26.59. Fib support UUP 26.50 (strong).

  • 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).

  • Stocks, Gold & Dollar Commentary September 23, 2019

    Stocks
    The market finally succumbed to serious selling pressure, on the back of a Bearish Weekly Squat, after probing for new highs — but falling short — on Thursday, finally losing less than 1% on the week. While all of our technicals remain solidly bearish, the big takeaway: The resilience of the New Economy sector when compared to the Old Economy, coming within a fraction of new highs. While this doesn’t rule out a good correction, it takes off the table a market crash at this time. We expect a continuation of the correction, on the back of another Bearish Weekly Squat, which should take SPY to good Fib support 293.08. We expect about 3 more weeks of choppy, range trading, with stocks becoming vulnerable to a bigger down-side move around October 11/14, when Bearish Momentum divergences set in, and an important cycle high is due. It is critical to see how the New Economy sector behaves during this period. A Weekly close under SPY 292 will turn our 89 line trends lower.
    Gold
    As mentioned last week, gold is going through its September correction with a lot of volatility and two-way trading. Starting on Monday from a high of 1513, to what may turn out to be the cycle low for the period, 1482.70 on Wednesday, spot rallied to close on the highs Friday 1517.70. The gold shares out-ran the metal, gaining nearly 6%. (XAU 94.60). Our cycle low is projected for Oct 1/3, so we expect more of the same, over the next few weeks. Silver has under-performed recently, but will start to close the gold/silver ratio on gold’s move to spot 1670.
    GLD sup 137.77, GLD res 143.92, SLV sup 15.66, SLV res 17.76, GDX sup 25.52, GDX res 28.87, 29.38.
    Dollar
    The greenback chopped in a narrow range (UUP 26.86 – 26.72) over the 5 days, closing near the highs (26.83).
    With interest rates heading for the zero-bound, the Dollar should break the uptrend, with a Fib target 26.47.