The algos controlled the market, limiting volatility to practically zero, while driving stocks up 2%, – through overhead resistance SPY 277.12 – to max Fib resistance 279.79 (actual high 279.93). But, in doing so, they couldn’t get many individual stocks to make new highs. Thus, while the market flirted with all-time highs, Market Breadth registered 14 week lows. The other important takeaways: Volume was at the lowest in at least a year (ex holiday weeks) and Market Range came in at a 7 month low producing a Bearish Weekly Squat. With all that said, our Upside/Downside Volume numbers remain bullish, and the New Economy sector was strong, so a decent amount of time of sideways trading is still needed before any kind of major sell-off (15 -25%) is in the cards. An important cycle high is due July 19. The initial correction should be in the range of 3 – 4%, (SPY 270.78 – 268.30 max) before another attempt at new highs.
Spot gold fell $13 (1241) but held above our max 1233 (low 1236.50). After leading bullion for nearly 6 months, the shares gave ground, falling 4.0%, and a 3 week low vs bullion. The metal is clearly in a bottoming area, but with the Dollar remaining strong and stocks in run-a-way mode, gold bulls will require patience. The key number for the XAU is a Weekly close over 86.38, for a sharp move to 105.49. To regain its bullish footing, GLD needs to close over 121.53 (spot 1280).
The Dollar held firm closing in resistance (UUP 25.00). Fib resistance (25.05- 25.52 strong). Fib support 24.04 (strong).