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  • Stocks, Gold & Dollar Commentary July 8, 2019

    Stocks On the strength of the “ceasefire” between Trump and Xi, stocks rallied into new high ground, with a theoretical SPY high of 299.10 recorded in overnight trading on July 4. However, the dynamics of the confrontation of the trade war has not changed. More problems on the trade front are still ahead of us, which will help instigate a recession, and trigger the bear market. On the technical side, our Volume Studies remain bearish, the New Economy sector has not regained leadership, Market Breadth is still lagging — thus, all systems are go, once Bearish Momentum Divergences have completed their set-up — likely by July 17. The first level of Fib support SPY 291.40. A Weekly close under SPY 286.40 and the bear is well underway.
    Gold
    An incredible volatile week for the precious metal, thanks to a desperate banking Cartel, which caused swings from 1409 to 1382, back to 1435 (high) to 1387, finally settling 1400. However, the 5 year break-out cannot be stopped, and the gap on GLD at 128 will not be filled, as a potential parabolic move may be underway, with spot 1670 as a measured target, based on a H&S bottom formation. Taking a much longer view, the potential for gold is much greater. The last bull market, covered 10 years, and took gold from $230 to $1900, a factor of 8. The fundamentals this time are much more bullish, with debt levels in the stratosphere, and the global economy much less secure, a factor of 8 would take a gold reset to over $8000. Think Bitcoin $18000 and the price is more than reasonable once “gold fever” hits. GLD Weekly Fib Resistance 143.00, 153.15, 167.60. The gold shares followed the metal, ending the week with a small minus. GDX strong resistance 49 – 52, which is faraway but will get there on the gold move. Silver remains the PM step-child, controlled by the Algos. At some point, every last ounce will be bought and delivered before the Algos lose control. SLV Fib resistance 14.74.
    Dollar
    The truce on the trade front brought Dollar strength, (we were wrong) and the UUP promptly gapped back over our 89 line trends to bullish. At the onset of the stock market bear, we expect the Dollar to weaken. A Weekly close under 26.08 will turn the Dollar bearish.

  • Stocks, Gold & Dollar Commentary July 1, 2019

    Stocks
    Stocks will likely have a brief rally when the futures start trading Sunday night, on a Trump “blink” allowing Huawei to, once again, buy high tech equipment from American firms, in exchange for the purchase of farm products from the US. The farm vote is essential for Trump to get re-elected in 2020. The gains will be fleeting, with the US heading for recession. Our Upside/Downside Volume studies remain solidly in the bearish camp, despite the recent run-up. We’ve been waiting for Bearish Momentum Divergences to show up, and they have already, and will intensify after the July 4th holiday. Market Breadth is bearish and the New Economy sector is still 4% from the highs, and is still significantly off the highs when compared to the Old Economy. To kick-off the bear, look for a SPY Weekly close under 285.60. SPY Fib resistance 295.00, 296.44.
    Gold
    The metal continued its break-out week by trading to spot 1438, only to be bombarded, in what may have been a record volume of Cartel paper shorts, driving the spot price to 1399.50 on the low, before settling 1409. I repeat from last week: On an intermediate term basis, spot 1670 is a realistic price this year, which would fulfill a H&S bottom price target. Longer term, we expect to see 2500. Silver followed gold, with SLV clearing 14.16, turning our 89 line trendlines bullish. SLV Fib resistance 14.74 (spot 15.70). The gold shares added 2.5% to last weeks 8% gain, and show more than a 30% rise in 5 weeks. The perfect gold call option position going forward from here is a fully paid for junior gold corporation (or junior ETF) with proven reserves, highly leveraged to the gold price, (mining costs all-in close to current gold price) in a jurisdiction with international treaties, with history of rule-of-law. These stocks have never been cheaper when compared to the S&P. GLD Weekly Fib Resistance (which will NOT change) 143.00, 153.15, 167.60.
    Dollar
    The greenback (UUP) barely moved, closing slightly better (UUP 25.97). With China and the US back talking, there should be good movement (down) starting next week. UUP should find support 25.72.

  • Stocks, Gold & Dollar Commentary June 24, 2019

    Stocks
    News that Trump and Xi agreed to meet at the G20 in Japan on June 28 to discuss trade, drove the SPY to new highs on Thursday (SPY 296.44). On weakening Breadth, the SPY new high was not confirmed by the Transports, which remain nearly 1300 points from new highs, and the New Economy sector, falling short by nearly a like amount on a percent basis. As we suggested, stocks will need time to work off the bullish momentum, from what is now a 9% rally that started on June 3. This process of creating Bearish Momentum Divergences will need a few more weeks to complete. Once complete, we expect stocks to resume the bear market. A key level of support that needs to be broken on a Weekly close is SPY 284, for the bear to start in earnest. SPY Fib support 289.83.
    Gold
    The metal had a break-out week, soaring to 1406, settling 1399. GLD has a huge gap at 128, and it remains to be seen whether this will be closed right away. With the cartel still intent on suppressing gold, a retest of the breakout is a distinct possibility. On an intermediate term basis, spot 1670 is a realistic price this year, which would fulfill a H&S bottom price target. Longer term, we expect to see 2500. Silver followed gold, with SLV clearing 14.16, turning our 89 line trendlines bullish. SLV Fib resistance 14.74 (spot 15.70). The gold shares rallied 8%, and despite bullion strength, managed to register a 10 week high against the metal and nearly a yearly high against the Dollar.
    Dollar
    The greenback closed the week on a downer, (UUP 25.95) losing 1.4%, and closing under our 89 line trendlines, indicating a bear trend is beginning. The Dollar (UUP) should find support UUP 25.72 for a bounce.

  • Stocks, Gold & Dollar Commentary June 17, 2019

    Stocks
    Stocks topped last week after a stunning 7% run over 6 days, and should now spend a few weeks of sideways trading, bound by a range of 291.50 on the high and 283 on the low, until sufficient Bearish Momentum Divergences show, to propel stocks below our 89 line trendlines at 283 on a Weekly closing basis. Trading volume was at a 7 week low, and a Bearish Weekly Squat was generated. Market Breadth fell considerably and the New Economy sector failed to show leadership, closing on the lows for the week.
    Gold
    The metal traded at its highest level in over a year, but as it threatened a Friday close over 1360 on a Weekly basis (actual high 1358), pulling in all the trend-followers, the cartel bombarded the futures with paper shorts, driving the metal down $21 off the high, a bounce brought it back to close 1341. Spot should find good support 1320 (GLD 124.54). Gold is poised for a sustained upside breakout this Summer. The reason the metal found impenetrable support around 1266 has to do with Russia, China, India and Turkey, who continue to buy physical at a prodigious rate. The gold shares led the metal last week with an 8 week high when compared to spot. SLV tested the bullish falling wedge breakout (13.72) and are poised to clear 14.16 to turn our 89 line trendlines bullish. GDX Fib support 22.73.
    Dollar
    The greenback has held firm for the past 6 weeks, trading in a 47 point UUP range. (26.47 – 26.00). Closing 26.31. Our ADX is trending toward “big-move” level, and should break lower this Summer as gold heads higher. A Weekly close under UUP 26.02 will turn trends bearish.

  • Stocks, Gold & Dollar Commentary June 10, 2019

    Stocks
    After a gap-down lower opening on Monday, which set the SPY low at 273.09, (and the New Economy sector setting 4 month lows) –  not quite reaching Fib Support SPY 271.01 –  stocks embarked on a spectacular 4 day rally, gaining back 5.5%, on rumors the Fed will soon reverse course and start lowering interest rates. With the rally achieving a 4 month high in Bullish Momentum, and a noticeable improvement the Market Breadth, stocks now need a few weeks of sideways trading for the bullish momentum to wear off, before the next sustained down-move can begin. Major Fib resistance 290.27. A trading top is due June 12. SPY Fib support 279.11.
    Gold
    Spot gold rallied $36, settling 1340.70, its highest price in over a year. GLD printed 127.25 matching spot. Unless the market can accelerate from this level to close over spot 1360, expect a decent pull-back to fill-out the neckline in an enormous H&S bottom formation, with a low around June 25. A strong Weekly close over GLD 127.25 projects to 134.96. GLD Fib support 123.85 (strong). The gold shares resumed leadership over the metal, recording a 6 week high, despite bullion strength. Without a strong gold close over 1360, the shares should range-trade over the next 2 1/2 weeks, with a low due around June 25. GDX Fib support 22.14, 21.86 (strong). Our scenario for a strong PM breakout over the Summer is playing out. SLV broke the bullish falling wedge formation with 14.20 print running into resistance and not able to clear. A strong close over 14.22 turn  trends bullish. SLV Fib resistance 14.74, 15.69 (strong). This may seem unrelated to reality today, but for very long term traders take note: When “gold fever” hits, an XAU QUARTERLY close over 106.35 will set the stage for a move to all-time highs 232.72. Fib resistance 164.80 (strong).
    Dollar
    With talk of a fairly imminent cut in rates, the greenback took it on the chin, falling into Fib support UUP 26.00 before settling 26.04. A strong close under 25.94 will turn trends bearish.

  • Stocks, Gold & Dollar Commentary June 3, 2019

    Stocks
    Stocks plunged 2.9% on tariff threats to Mexico — met our criteria for a Weekly close under 280.57 — turning our 89 line trends lower, and are now 7.3% off the highs, confirming the bear market started last October on a Dow Theory sell signal, which was never refuted despite the 6 month rally. Average bear market lows have sliced close to 60% off the major averages over time. This bear market will likely be led by the Transports and the New Economy sector. SPY Fib support 271.01, 263.43. SPY Fib resistance 281.64, 288.80, 290.43 (strong).
    Gold
    Despite all-out war against gold by the cartel, the rush to safety on Friday was self evident, as the metal soared to close 1304.90 — a 10 week high — after trading 1274.20 a day earlier. The gold shares (XAU) gained more than 5%, and regained leadership despite the stronger Dollar. Our call for a low in the shares off a Triple Bullish Momentum Divergence was correct. Trends have turned bullish for the metal with the GLD closing 123.33. GLD Fib resistance 124.39. More work is needed for the GDX which needs a strong close over 21.76. Actual high 21.74. GDX Fib support 21.30. Silver, which has been artificially beaten down through excessive paper shorting — having excessive EFP’s going to London for paper settlement — has the biggest potential with the gold/silver ratio at 85, and over the coming bull market, has the potential to drop to 30. SLV needs a strong close over 14.26 to turn trends bullish. An SLV print 14.05 will bust the bullish falling wedge formation, leading to much higher prices.
    Dollar
    After the big reversal down last week, on renewed chaos in the currency markets, the greenback found a temporary bid and surged to test multi-year highs –  before failing — to close with a small gain for the week. A strong close under UUP 25.94 will turn our trends lower, and the start of a bear market.

  • Stocks, Gold & Dollar Commentary May 27, 2019

    Stocks
    Stocks fell 2.0% in a choppy week of trading in very light volume, as US/China trade positions hardened, but did not go to new lows, as our 89 line trendlines held support (SPY 280.57), settling on the week 282.78. With the New Economy sector leading the downside, (11 week lows when compared to the Old Economy) stocks are primed to continue to go lower, after bouncing to a high day around June 3. SPY resistance 287.31, 289.40. A Weekly close under SPY 280.57 turns trends lower with projected support targets 277.65, 271.01, 263.43.
    Gold
    Spot gold successfully tested its 55 week mvg avg (1269), actual low on 5/21 1269.50, then rallied over the next 3 days to settle 1284.70. The fly in the ointment is the relative weakness in the PM shares which fell to 6 month lows (XAU 65.85). International investors are the main constituency for the sector and multi-year Dollar strength may be playing a role in the shares unusual weakness. Triple Bullish Momentum Divergences mean we are very likely at the low. To confirm the metal low for this cycle, we’re looking for spot gold to print 1325. However, this late in the cycle, a spot print 1304.20 (7 week highs) will likely do the trick, on the way to a Weekly close over 1360 for a Summer bull run to 1600. Key metrics: GDX Daily close over 21.76, GLD Daily close over 122.52, SLV Daily close over 14.30 turn trends bullish.
    Dollar
    A major reversal on Thursday, after touching multi-year highs (UUP 26.47), the greenback closed down on the week (UUP 26.25). A strong close under 25.91 will start bear phase, and confirm high.
     

  • Stocks, Gold & Dollar Commentary May 20, 2019

    Stocks With the break-up in US/China trade negotiations, stocks had a volatile week — cratering on Monday to start the week — falling 5.1% (SPY 279.93) from the May 1 high (294.95), but managed a strong come-back, closing 285.84. With the New Economy sector giving up more ground when compared to the Old Economy –  registering 7 week lows –  and with our Upside/Downside volume studies, Momentum and Breadth still giving off bearish signals, stocks are primed for more downside, after an important high is put in around the end of May. SPY Fib support 277.65 (strong). SPY Fib resistance 290.48.
    Gold
    Bullion started the week strong, rallying into spot resistance 1298 – 1305. Actual high 1302.20. Then fell sharply for the rest of the week, settling 1277.40, after touching 1274.50 on Friday. The shares, showing surprising relative strength, actually had an up-week, with the XAU closing 67.49, a fractional gain. Key metrics to look for. An XAU Monthly close over 76.96 will start bull move, breaking speedline from 8/7/16, and crossing over both 89 line trendlines, turning trends bullish. For the metal: Spot gold print 1311 will likely take spot to 1325 and confirm the low of this cycle is in rear view mirror. Then Weekly close over 1360 will start run to 1600. All part of Summer rally, while stocks enter bear market. For metal ETF’s: GDX Daily close over 21.79, GLD Daily close over 122.61, SLV Daily close over 14.40 turn trends bullish. Spot gold 55 week mvg avg 1268.72. Mkt has had Weekly close over mvg avg for 21 consecutive weeks.
    Dollar
    The greenback was strong, matching multi-year highs (UUP 26.35) as the trade war intensified the international scramble for Dollars to meet obligations.  A strong close under UUP 25.85 will start bear phase and should coincide with market top.
     

  • Stocks, Gold & Dollar Commentary May 13, 2019

    Stocks
    On news of an impasse on trade negotiations between the US and China — and the threat of additional tariffs — stocks fell for 4 straight days, but finally found support on Friday near Fib support SPY 282.13 (actual low 282.30), a decline of 4.6% from the recent high SPY 294.95.  As expected, the New Economy sector led the downside, recording a 5 week low when compared to the Old Economy. Strong Fib support SPY 277.65. Unless China retaliates strongly by imposing tariffs on US goods and depreciates the Yuan by more than 2%, the market should bounce from an oversold condition, in choppy fashion, to SPY 291 – 293, with a major top around the end of May.
    Gold
    While spot bullion recorded a four week high (1291.20) settling for the week 1286, the shares (XAU) continued to struggle, falling 2%, settling 67.29. Volume fell off dramatically, registering 18 week lows, and less than half when highs were being made 2 months ago. At this point, the shares are not being viewed as a safe haven. We expect the stocks to re-establish leadership when stocks top out, and enter a bear market. Spot gold strong support 1248. Spot gold print 1325 will put low in. Weekly close over 1360 will start run to 1600.  GLD Fib resistance 124.39. SLV Fib resistance 14.73. GDX Fib resistance 22.50. Gold 55 week mvg avg 1268.56.
    Dollar
    The greenback continues to serve as a safe haven during the tumultuous stock and bond markets, and closed little changed UUP 26.15. The Dollar will be heading lower after stocks top. UUP Fib support 25.89 – 25.80.

  • Stocks, Gold & Dollar Commentary May 6, 2018

    Stocks
    A 2% drop over a two day period was promptly reversed on Friday’s bullish jobs report, sending stocks approaching, but falling short of new highs. A negative momentum day was registered on Thursday, after a record-breaking 22 consecutive days of bullish momentum. Along with that, our Upside/Downside Volume studies finally achieved a string of near-term bearish readings, as well as a trend “turndown” on our ADX. Stocks have virtually run out of room on the upside, and should now be followed by a period of weeks of modest, choppy declines and rallies, while the New Economy sector starts to under-perform, ultimately leading to an important high around the end of May.
    Gold
    The metal was rigged with paper selling pressure all week, with spot gold testing 1266, before bouncing Friday on the jobs report, settling 1279. Spot gold strong support 1248. Spot gold print 1325 will put low in. Weekly close over 1360 will start run to 1600.  GLD Fib resistance 124.39. SLV Fib resistance 14.73. GDX Fib resistance 22.50. The shares (XAU) were weaker, losing 5%, settling 68.79, and recording a 15 week low vs the metal. With our Upside/Downside volume studies continuing to show multi-week bullish divergences, any short-term weakness is looked upon as extraordinary buying opportunities. Spot gold 55 week mvg avg 1268.24.
    Dollar
    The greenback was soft, pulling back from an over-bought condition with UUP settling 25.16. UUP Fib support 25.86 – 25.77 (strong).