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  • Stocks, Gold & Dollar Commentary July 24, 2017

    Stocks
    Stocks traded modestly lower early in the week, then went on to new highs later, closing with small gains led by the New Economy sector. Volume was light, but with the smallest range in 4 weeks, a Bearish Weekly Squat formed, projecting lower prices. An improvement in Market Breadth along with improved Upside/Downside volume, strongly suggest no large scale sell-off at this point. SPY Fib support 245.06, 244.23, 243.37 (strong).
    Gold
    In dramatic fashion, gold rallied $26 on the week, to close over its 55 week mvg avg (1239.79), after closing under it 2 weeks in a row, thus maintaining its strong bullish stance. But the big story is the potential explosiveness of the gold shares which rallied 3.5%, and now finds itself up against the Daily 89 line and a speedline going back to the 8/11/16 high. A pullback to XAU 82.06 is a possibility, before the breakout begins in earnest. With the Weekly ADX in hyperbolic territory (7.55), a strong close over 87.40, a target of 127 – 128 is within reach.
    Dollar
    With its 2nd consecutive close under 24.65, the Dollar (UUP) finds itself on the cusp of starting a bear market. With a UUP print of 23.95, the Dollar will hit a 2 1/2 year low! Fib Resistance 25.65 (strong).


  • Stocks, Gold & Dollar Commentary July 17, 2017

    Stocks
    Stocks busted through the recent trading range (243.60 – 240.00) on dovish testimony by Yellin before Congress, strongly hinting Fed funds would not be raised much further. That’s all the robotraders had to hear to push stocks relentlessly into new high ground, on scant volatility, with the biggest rise on Friday to close SPY 245.97. With a high day expected last week, and the New Economy sector not confirming the rise, odds favor a modest pullback into a new trading range over the next few weeks. Despite the strong surge on Friday, the Daily SPY ADX has not turned up from low levels. SPY Fib support 243.47, 242.79 (strong).
    Gold
    As suggested last week, a bounce started in gold with spot touching 1232, before closing 1228. The gold shares led the rally, with the XAU touching 81.67, close to Fib resistance 82,03, before settling 80.80. A pullback is expected to Fib Support 79.91. GLD Fib resistance 118.11 (spot 1240).
    Dollar
    The Dollar weakened on Yellin comments, and closed UUP Friday 24.62, the first of 3 potential Weekly closes under 24.65, which would start a Dollar bear market. With Fib support UUP 24.57, there is a likely snap-back bounce-back over 24.65.


  • Stocks, Gold & Dollar Commentary July 10, 2017

    Stocks
    Stocks stuck to their recent pattern of gyrating wildly, but maintained trading within the recent range as outlined last week (SPY 243.60 – 240). An important high is due next week (7/12-14). The New Economy sector, as expected,   bounced slightly after recording a 9 week low against the Old Economy, staging their biggest comeback on Friday. With the Daily SPY ADX approaching “big move” territory, a break under SPY 239.96 should see a move down to SPY 237.37 where it joins a speedline going back to March 27, 2017. A break of the speedline and 234.48 is maximum downside at this point, resulting in a relatively minor 4% correction from the high.
    Gold
    Friday saw panic selling in paper gold futures, as weak holders bailed, with a low spot print of 1207, on the 2nd highest trading volume in 7 months. A $5 bounce off the lows brought the weekly close to 1212. Gold has likely seen its low (or close to it) and a bounce covering 5-7 days should start right away, with an initial upside target of 1240 spot (GLD 118.09). After the bounce, expect a pullback as gold completes its bottom. As is usual, the shares were pummeled, registering 8 month lows compared to the metal. On the holiday shortened week, the XAU actually completed a Bullish Weekly Squat, so a decent rally is likely with XAU targets 82.03 – 83.39 (strong). After 7 consecutive weeks of spot closing above its 55 week mvg avg. (1239.73) gold closed below it, and now needs to regain this important metric for the bull market to continue. Gold investors need to remember this important message: Gold and silver investors can take comfort from the fact that all manipulations fail in the long run. Whether it’s the“gold corner” of 1869, the “gold pool” of 1968, Kissinger’s secret “gold dump” of the late 1970s, or “Brown’s bottom” (when the U.K. sold most of its gold at 30-year low prices) of 1999, or the more recent gold games on the Comex, all manipulations fail. Gold prices always find their way higher, because paper currencies always lose value over time. Today’s crash represents a gift to investors. We now have a better entry point for what will still be much higher gold prices later this year.
    Dollar
    The Dollar bounced slightly off Fib support, but is excruciatingly close to bear market territory (3 consecutive Weekly closes under UUP 24.65).


  • Stocks, Gold & Dollar Commentary July 3, 2017

    Stocks
    In the short-term stocks have likely completed their correction, with a SPY low 239.96. Unless news of a decidedly bearish nature comes out, we expect stocks to be range-bound over the next two weeks, (243.60 – 240.00) with an important high due July 13. Last week saw an improvement in our Upside/Downside volume ratio, along with an oversold 9 week low in the New Economy sector vs the Old economy,  indicating the high probability for a strong bounce. As a proxy for the New Economy, we’ll keep a close eye on QQQ, where 141.00 looks like the maximum print on the rebound.
    Gold
    Gold retreated $14 last week, (after 56 tons of paper gold was dumped by the Cartel on Monday) with spot closing near our 55 week mvg avg (1240.24). There is a possibility for another $8-10 dump (spot 1231) to complete its correction. Despite golds weakness, the Dollar was even weaker (9 month closing low). The shares are completing its sell-off as Upside Volume has improved the last 2 weeks. With the Weekly XAU in “huge move territory”, a Weekly close over 87.65 will send the stocks skyrocketing.
    Dollar
    The Dollar (UUP) retreated close to bear market territory (3 consecutive Weekly closes under UUP 24.65), trading to 24.71. A bounce is likely as Fib support comes in at 24.77 – 24.57.


  • Stocks, Gold & Dollar Commentary June 26, 2017

    Stocks
    After gapping higher to start the week — making new highs (SPY 244.73) — stocks retreated to end slightly higher. Through the “sturm and drang” of five days trading, the two big takeaways: an all-time new high in Big Block/Volume by a long shot (155,604 blocks of 5000 shares or more, on overall modest volume, and an 8 month high in 52 week lows. With Upside Volume still deteriorating, upside momentum practically nil, and the New Economy sector failing to regain leadership, the path for stocks remain down. A bearish Weekly Squat should see SPY 238.97, 237.37 as good targets and Fib support for bounces.
    Gold
    Gold traded lower early in the week, testing its 55 week mvg avg (1240.23). Actual low for spot gold 1241, but rallied the final three days, closing 1256. Regaining market leadership were the gold shares, rising nearly 5% on the week. With volume modest, there should be more sideways trading before a clear breakout. XAU 85.21 is good Fib resistance. With the Weekly XAU in “huge move” territory (ADX 8.58) it will take three (3) consecutive Weekly closes over 87.71 for a potential spike target 112.15.
    Dollar
    Small, quiet upweek, but closing near the low of the Weekly range. UUP Fib resistance 25.66 – 25.85 (strong).
    Three consecutive Weekly closes under 24.64 will send the Dollar careening in a bear market.


  • Stocks, Gold & Dollar Commentary June 19, 2017

    Stocks
    After challenging all-time highs, followed by a late week selloff, stocks ended little changed. The New Economy stocks continued to under-perform, which has now put in place the final ingredient necessary for a more extended correction. An important cycle high is due 6/21-22 with SPY 243.76 – 244.00 as formidable Fib resistance. The market should find support for good bounces at SPY 238.97 and 237.37 (strong).
    Gold
    Spot gold traded as low as 1251, closing 1254 on the week. More sideways trading was expected before the breakout to the upside, but not the extent of the gold share sell off, with the XAU closing 79.73, a 6 week closing low. The market is now sufficiently oversold to expect a good bounce to XAU 83.04 – 84.07 (strong). Bullion still remains comfortably above its 55 week moving average (1239.95).
    Dollar
    After setting new lows on the Fed announcement of a quarter point raise in the Fed funds rate, the Dollar bounced, but still closed slightly lower on the week. UUP Fib resistance 25.66 – 25.85 (strong).
    Three consecutive Weekly closes under 24.64 will send the Dollar careening in a bear market.


  • Stocks, Gold & Dollar Commentary June 12, 2017

    Stocks
    Friday saw the start of the breakdown in the New Economy sector with about a 2% decline vs the Old Economy, and the final piece of the puzzle in place for the start of a significant decline in stocks. The important takeaway was a new high in Big Block/Volume as institutions bailed out of technology. SPY Fib support 239.83, 238.43 (strong). Good bounces can be expected at these levels.
    Gold
    With gold approaching 1300 on Tuesday, the cartel unleashed massive short paper contracts, taking the metal to Fib support 1264, before bouncing to close the week 1267.50. The gold shares exerted leadership over the metal, closing slightly higher on the week. More sideways trading is expected before the shares and metal break to the upside with GLD 126.02 – 126.27 as initial targets. As we go out further in the year GLD trgts 132.96 and 140.42 will be attainable. With the Weekly ADX on the XAU in “big move” territory, three (3) consecutive Weekly closes over XAU 87.84 should propel the index to 112.10 (Monthly 89 line) before the year is out.
    Dollar
    The Dollar, up slightly last week, has trended lower for 6 months after peaking in early January. UUP Fib resistance 25.66 – 25.85 (strong).
    Three consecutive Weekly closes under 24.64 will send the Dollar careening in a bear market.


  • Stocks, Gold & Dollar Commentary June 5, 2017

    Stocks
    For several months, while the market has been deteriorating internally, with weakening Upside Volume, Momentum and Breadth, we’ve maintained that no serious correction can take place without a breakdown in the New Economy sector. Last weeks pull-out from the Climate Agreement gave stocks a fresh impetus, as it was interpreted as bullish for the American economy. To date, the New Economy sector continues to surprise, despite the overall weakening in the technicals and fundamentals, by outpacing the General Market on an almost daily basis. Last week was no exception, even after the recent sharp 2% decline in the SPY. For the time being, the SPY finds good support 239.55, with a strong confluence level 238.25, only a few percent lower from the highs.
    Gold
    Bullion rose $11 last week to close 1278, far outpacing the shares which saw a modest decline. The gold stocks have seriously lagged the metal, which registered a 29 week low against spot. This is about to change. The XAU has pulled back, as it touched the Weekly 89 line 3 weeks ago. But while biding its time, the Weekly ADX has entered “big move” territory, with its lowest reading in years. Spot gold, on the other hand has seen two (2) consecutive weekly closes above its Weekly 89 line, and looks positively explosive should it make its 3rd consecutive close. More conclusively, spot gold has completed three (3) consecutive weeks above the 55 week mvg avg. (1239.08). There may be some hesitation to bust out immediately, due to lagging stocks, but the breakout to much higher levels is inevitable.
    Dollar
    Down sharply last week, and headed for UUP 24.77. Three (3) consecutive Weekly closes under 24.64, and the Dollar will start a bear market.


  • Stocks, Gold & Dollar Commentary May 22, 2017

    Stocks
    Stocks had a sharp 2% decline, touching our near term target SPY 235.58 (actual low 235.43!!), before a snap-back rally, recovering more than half the decline by Friday’s close (238.31). With Upside Volume, Breadth and Momentum continuing to flag, this is only the beginning salvo in a correction that could reach a maximum SPY 218.44. A more likely terminal point is SPY 227 – 226, before a final rally, where we anticipate a dramatic weakening in the New Economy sector to finally show up. This has not been the case up until now, as new highs were made despite the decline in the General Market. This choppy correction should carry for seven (7) weeks into the first week in July.
    Gold
    Failure to close for the 3rd consecutive week under its 55 week mvg avg (1237.83), which would have turned the trend lower, spot gold rose $28, closing out the week 1255.60, and recorded a 6 month high when measured against the Dollar. The shares lagged bullion, but nevertheless traded at a 4 week high, registering a Bullish Weekly Squat. On the Weekly, prices are butting up against the 89 line and a speedline from mid August 2016. With our Weekly ADX about to enter “big move” territory, an explosive move is likely.
    Dollar
    After holding steady for 3 weeks, the Dollar (UUP) broke Weekly support UUP 25.20, recording a 7 month low, and is now headed for bear market territory (3 consecutive Weekly closes under 24.63). Weekly Fib support 24.67 (strong).


  • Stocks, Gold & Dollar Commentary May 15, 2017

    Stocks
    On the outcome of the French election, SPY recorded an equivalent new high (240.32) in overnight futures trading, but it was short lived. For the week, a modest decline in the General Market, while the New Economy sector continued to vastly out-perform the Old Economy. With Upside Volume showing no improvement, Market Breadth worsening, and Institutional Distribution of stocks at 3 month highs, the immediate direction still remains down, with SPY targets 236.53 – 235.58 (strong Fib support), before another stab at new highs, where we anticipate a severe weakening in the New Economy sector, and the prelude to a more significant sell-off.
    Gold
    Cartel selling continued unabated to start the week off, driving the metal to major Fib support (1211 – 1215) before rallying to close out the week at 1228. But the real story for the precious metals was the leadership in the shares which rose 6% (XAU 84.97). Daily bullish momentum made an 8 week high. Look for 3 consecutive Weekly closes over 87.99 (89 line and intersecting speedline) for an explosive rally, as the Weekly ADX approaches “big move” territory (under 10). An important low is due next week around May 17.
    Dollar
    Despite the modest bounce, the Dollar is headed for Fib support 25.20 (UUP). Three (3) consecutive Weekly closes under UUP 24.61 and a new bear market in the Dollar will have begun.