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).
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.
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).