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  • Stocks, Gold & Dollar Commentary September 25, 2017

    Stocks
    For 5 days stocks tacked on a miniscule gain with SPY barely exceeding a 1 point range. The net result was another Bearish Weekly Squat — this time a classic — the strongest in 5 months. The main takeaways for the week was a sharp drop-off in the New Economy sector vs the Old Economy, an overall weakening in Bullish momentum and Market Breadth. This does not mean a huge sell-off from here. But rather an initial modest decline to SPY 245.98 – 243.65 maximum, followed by a bounce to challenge the highs, which should set-up for a bigger top. Ultimately major Fib support comes in at 240.85.
    Gold
    On the threat of higher interest rates, as the Fed contemplates shedding bonds from its balance sheet, weak holders bailed out of paper gold, driving spot to 1293, exceeding our maximum downside by only $10. Spot closed Friday 1297, and is now ready to resume the bull market. The XAU fell to the Daily 89 line (84.88) and ended the week 86.06, with the Fast 89 line remaining above the Slow 89 line (life cross) for the 9th consecutive week, and likely to remain in this bullish configuration going forward. Look for an XAU Weekly close over 87.38 to get index moving substantially higher.
    Dollar
    Despite a slight bounce for the week (UUP 23.92), the Dollar remains mired in a bear market that is just beginning. It will take (3) consecutive closes over UUP 24.59 to turn the Dollar bullish. Fib support UUP 23.33.


  • Stocks, Gold & Dollar Commentary September 18, 2017

    Stocks
    From the get-go stocks rallied to new highs each day last week, but the total gain from the high last reached on Aug. 7 was less than 1%. While our technicals have now turned mostly positive to neutral, a powerful Bearish Weekly Squat on top of 3 Daily Bearish Squats strongly suggest a correction should take place with downside targets SPY 246.90 with a maximum 243.65. Several weeks of trading are needed before any semblance of a final top can, once again, take place.
    Gold
    As we suggested, gold was ready to correct into Fib support, falling $27 to close Friday 1319. With spot falling so sharply in one week, there is likely some additional downside, with a maximum 1303 spot. However, once the correction is out of the way, the bull market will continue in earnest with a major target of 1700 within 6-9 months. The gold shares had their 3rd consecutive Weekly close over the 89 line. Some additional downside pressure is likely with XAU 86.97 as important Fib support. The taking out of 93.32 will see a fast run to 105.49 (strong).
    Dollar
    The Dollar (UUP) had a meaningless bounce (23.84) but remains entrenched in a bear market, with the 1st close under the Monthly 89 line. Good Fib support 23.32.


  • Stocks, Gold & Dollar Commentary September 11, 2017

    Stocks
    Stocks opened the week sharply lower, trading into initial Fib support (245.70). Actual low 244.95. Then spent the next 3 days practically comatose, in very narrow range trading, losing less than 1% when all said and done. The improvement in Upside/Downside volume along with Market Breadth tells us there will not be any meaningful large scale collapse of stock prices on the immediate horizon. It will eventually come, but not likely for several more weeks. The New Economy sector gave the first inkling of an eventual weakening in stock prices by lagging the Old Economy.
    We expect a challenge to the old highs, and a possible “3 drives to a top” scenario early in the week, with Fib resistance 248 – 249! Fib support 244.20 – 243.22.
    Gold
    The metal decisively punched through 1300 settling Friday 1346.40 —  but now in an overbought condition face a $20 -$30 pullback to GLD 125.99 – 125.35. Nevertheless, spot gold is on its way to 1700 over the next 6 – 9 months, with the shares leading the charge. Important XAU Fib resistance 105.49. Major Fib support XAU 86.97!
    The metal has now closed over its 55 week mvg avg (1246.59) for 8 consecutive weeks.
    Dollar
    The last time the Dollar (UUP) closed this low (23.70) was December 2014, and remains fully entrenched in a bear market.


  • Stocks, Gold & Dollar Commentary September 4, 2017

    Stocks
    Here we go again. Despite valuations at “nose-bleed” levels, new all-time high-ground by the New Economy sector vs the Old Economy, and an improvement in Market Breadth, has likely pushed any major sell-off in stocks at least several weeks into the future. However, with the announcement of a successful hydrogen bomb test by the North Koreans, stocks should open the week lower. Four days of market rally pushed SPY past our maximum 247.39 to 248.33, where back-to-back Bearish Squats formed, indicating sell-off just ahead. Good Fib support 245.75 and 242.20 (strong).
    Gold
    Spot gold broke free of 1300 to close Friday 1324.40, but was led by the gold shares as the XAU recorded a 15 week high 90.79, decisively closing over its Weekly 89 line (87.31), and on its way to Fib res 105.49. Both the metal and shares made multi-year highs when measured against the Dollar. XAU Fib support 85.95 (strong).
    Dollar
    A slight bounce, holding critical support 23.98 which is our Monthly 89 line. Fib support UUP 23.17 (strong).


  • Stocks, Gold & Dollar Commentary August 28, 2017

    Stocks
    No crash in stocks is on the immediate horizon. A Bullish Weekly Squat in the Old Economy sector, improvement in Market Breadth, a 12 week high in the New Economy (overbought) and heavy institutional accumulation while stocks were making a low on Monday, strongly suggest more range trading ahead. Fib resistance SPY 246.27 to a maximum 247.39. Fib support 242.04 to a maximum 240.48. Expect high day August 30-31. 
    Gold
    A 20 million oz gold sale in the paper futures market was met by heavy physical buying, as the cartel failed to drive the metal lower on Friday. The end result was a 42 week closing high in the spot market (1290.60), setting the stage for a potential breakout, and an initial move to spot 1326. The shares rallied 2% and are poised to continue to rally to 93.00 (heavy resistance) and 105.49!
    Dollar
    The Dollar, already in a bear market, appears setting up for a free fall on a sharp close under UUP 23.98, which is our Monthly 89 line. Fib support UUP 23.17 (strong).


  • Stocks, Gold & Dollar Commentary August 21, 2017

    Stocks
    Stocks spent the first 3 days rallying sharply into overhead Fib resistance (SPY 247.57) then embarked on the largest sell-off in 6 months, coming within ticks of our downside target 242.04. (Actual low 242.20). There may be some additional downside to a maximum SPY 240.48, but a spirited rally is not far behind. Despite a collapse in Market Breadth and intensifying Downside Volume, with the New Economy sector still outperforming the Old Economy, we’re not ready yet to call for a major decline. The potential is for SPY to bounce to the 246 level by the end of August. The decline from the market high has been 2.3% to date. By the time this part of the decline phase is over we expect that to be doubled to around 4.6%. 
    Gold
    As spot gold printed 1300, the cartel came out with bazookas blazing, flooding the paper futures markets with sell orders. Spot settled on Friday 1286, $14 off the highs. GLD support 121.49 (1275 spot). The gold shares made a 13 day high on Friday, then sold off in sympathy with bullion selling, but still had 3 consecutive closes over the XAU Daily 89 line. A pullback of several days is likely, before the upmove begins in earnest. XAU support 82.93.
    Dollar
    The Dollar was modestly higher on the week.
    It will take 3 consecutive Weekly closes over UUP 24.64 to reverse the bear market.


  • Stocks, Gold & Dollar Commentary August 14, 2017

    Stocks
    Stocks finally had a decent sell-off, touching important Fib support SPY 243.56. (Actual low 243.70). We don’t expect much more downside than SPY 242.04 at this point, unless hostilities were to breakout in the Korean peninsula. With relative improvement in the New Economy sector vs the Old Economy, a bounce to SPY 246.43 is a possibility over the next week or so. In any event, last week was the first salvo in a market correction that will last several months.
    Gold
    The metal had a strong week, rallying $32 to close 1290.50, and now approaches $1300 where it was rebuffed on the prior 2 occasions by the gold cartel, flooding the futures market with paper contracts. It’s likely we’ll attempt to see a repeat, creating a “3 drives to a top scenario”. If “Korea” intensifies 1300 is only the first stop on the way to new highs. Bullion registered multi-year highs against the Dollar. The XAU had 2 closes above the Daily 89 line, and look explosive based on an ADX Weekly reading with an 8 handle. Three consecutive Weekly close over 87.27 and the shares could run to 128.22.
    Dollar
    The Dollar was down for the week. 
    It will take 3 consecutive Weekly closes over UUP 24.64 to reverse the bear market.


  • Stocks, Gold & Dollar Commentary August 7, 2017

    Stocks
    Despite the major averages eking out new closing highs last week, all of our studies continue to show deterioration including 3 straight weeks of Bearish Weekly Squats (the last on a classic 3 month low in Weekly Range). Therefore, we’ll stay with our call for an imminent correction of some magnitude. SPY downside targets 244.47, 243.56 with a maximum print of 241.51, before a significant bounce.
    Gold
    A pullback from overbought territory came on schedule, as the metal retreated into Fib support (GLD 119.22).
    The shares may have some more downside (XAU 81.69).  At most, we see another $10 – $12) downside for the metal to GLD 118.69 (1247 spot). Spot gold remains comfortably above its 55 week mvg avg (1240.66). Once the turn happens, the shares are potentially explosive. With the XAU Weekly ADX at a 7 handle, a move to 127 – 128 is entirely possible.
    Dollar
    After touching 2 1/2 year lows, the Dollar (UUP) bounced to close slightly higher on the week (24.23). It will take 3 consecutive Weekly closes over UUP 24.64 to reverse the bear market.


  • Stocks, Gold & Dollar Commentary July 31, 2017

    Stocks
    It’s been a very challenging period to pick the top, however back-to-back Bearish Weekly Squats, a failure to confirm positive Upside/Downside volume, non-confirmation by the New Economy sector vs the Old Economy, weakening Market Breadth on new highs, dramatic slowdown in Momentum while institutional Big Block selling continues unabated, has us convinced a sell-off of some magnitude is imminent, albeit the possibility for a final stab at new highs early in the week. SPY Fib support 244.55, 243.62 with a maximum print 240.85 before a significant bounce.
    Gold
    A strong week for bullion (8 week high – spot 1269) and the shares (7 week high – XAU 85.56). Fib resistance spot gold 1277 and a pullback from overbought territory is likely. GLD has had an ongoing battle to clear the Weekly 89 line, having failed the 2 prior occasions. It has now cleared the 1st week, and needs 2 more consecutive weekly clearances over 119.97, for the bull market in gold to begin. The 55 week mvg avg (1240.32) is in a strongly bullish mode. The XAU needs 3 consecutive Weekly closes over 87.38  to confirm its bull market. With the Weekly ADX in “huge move” territory (7.85) a monster move  to 127 – 128 is possible.
    Dollar
    With UUP closing 24.18, for the 3rd consecutive Week under the 89 line, the Dollar bear market has begun. It will now take 3 consecutive Weekly closes over UUP 24.65 to reverse the situation.


  • 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).