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  • Stocks, Gold & Dollar Commentary January 15, 2018

    Stocks
    Stocks raced ahead, closing the week at new all-time highs. Bullish Upside volume, a new high in Bullish Momentum, as well as new highs in Breadth point to a continuation of this runaway bull.  For the first time since the bull market began, SPY has penetrated our Fib 9.87 line, indicating an extremely overbought market. The most the bears can expect are relatively small corrections. While the New Economy sector also made new highs, it lagged the Old Economy, and may indicate a change is coming, although it will take several weeks to unfold. SPY Fib support 266.48, 263.62 (strong).
    Gold
    Spot gold closed the week at 1338, decisively above key cartel resistance of 1320 – 1325. An important cycle high was due last week, and a small correction is likely. For the 2nd week in a row, XAU closed decisively above 86.68 (Weekly 89 line) at 89.11, and appears ready to make it 3 in a row, and on its way to 105.59 resistance. Important Fib support GLD 123.43 (1302 spot).
    Dollar
    The Dollar (UUP) fell sharply heading for Fib support UUP 23.36, with major support 22.40.

  • Stocks, Gold & Dollar Commentary January 8, 2018

    Stocks
    With the improvement the prior weeks of bullish Upside/Downside volume, stocks did not correct as we thought, but instead were propelled higher every day last week, and bullish momentum was reestablished. In addition, new highs were made in the New Economy, although the sector somewhat lagged behind the Old Economy. Time is needed as the market “rinse and repeats” and goes through the same cycle, in order to dissipate bullish momentum once again. SPY Fib support 265.08, 259.47 (strong).
    Gold
    Bullion and the gold shares were strong, with GLD coming close to Fib resistance 125.98 (actual high 125.85).The market is approaching a cycle high by mid-week and a correction is due, with the gold cartel stepping up paper sales over 1320. Major Fib support 122.68 (1292 spot). The XAU completed the first Weekly close over 86.68, and on the completion of 3, will be on its way to 105.49, an important target and resistance. Spot gold settling at 1319 is comfortably above its 55 week mvg avg 1256.63.
    Dollar
    The Dollar (UUP) was slightly lower (23.97) clinging to the Monthly 89 line (23.99). Fib targets 23.32 – 22.40 (2 to 3 year lows).

  • Stocks, Gold & Dollar Commentary January 1, 2018

    Stocks
    With 2017 drawing to a close, stocks opened Friday on new highs with SPY trading near 269 (actual high 268.55) only to sell-off sharply on the close (266.86). Bullish momentum has clearly dissipated, and a modest move down is likely, breaking 265.39 and turning the 13 day trend lower. Important SPY Fib target 263.56, resting on a speedline going back to August. Unfortunately for impatient bears, this is not the start of a major decline with Upside/Downside volume improving on the rally of the past several weeks. What’s needed for a good top to be in place is a few days of heavy Downside volume, followed by a rally to challenge the highs by mid January on weaker volume and failing bullish momentum. For this to happen, the New Economy sector has to continue to under-perform (reaching 10 week lows last week) when compared to the Old Economy.
    Gold
    Spot gold closed the year at 1303, with the shares up a modest 1 1/2%.  The important takeaway is the leadership of the shares, with an 11 month high compared to bullion. While a near-term pullback is likely, look for a GLD close over 130 (1367 spot) to put it on a trajectory to GLD 164.63, completing a target off a H&S bottom. Near term Fib resistance GLD 125.98. Near term Fib support 121.28.
    Dollar
    The Dollar (UUP) was weak closing down 1% for the week and is perilously close to turning the very long term trend
    (Monthly) lower on 3 consecutive closes under UUP 23.99 (Monthly 89 line) with targets 23.32 – 22.40 (2 to 3 year lows).

  • Stocks, Gold & dollar Commentary December 25, 2017

    Stocks
    The Old Economy stocks managed a run to new highs early in the week, while the New Economy stocks lagged behind. Bullish momentum continued to ratchet down, and in the process, with the smallest range in 8 weeks, a Weekly Bearish Squat formed indicating a modest sell-off is likely while bullish momentum continues to dissipate. Near term Fib support comes in at SPY 263.19. Longer term Fib support SPY 258.10, but we don’t expect that to happen until SPY possibly challenges the 269 – 270 level as we approach the end of 2017.
    Gold
    Bullion had a strong week rising $27 to 1274.20, but assuming PM leadership were the gold shares, with the XAU gaining 5%. XAU Fib resistance sits nearby at 84.37. A strong Weekly close over 86.72 will be a clear breakout, and with our ADX approaching “big move” territory, 105.49 becomes the next major target and resistance.
    Dollar
    The Dollar was lower with UUP closing 24.23. Longer term, the Dollar remains bearish under our Weekly 89 line (24.56).

  • Stocks, Gold & Dollar Commentary December 18, 2017

    Stocks
    The Old Economy stocks raced ahead last week, gaining 1 1/2%, closing at new all-time high ground Friday, while the New Economy stocks bounced back from 2 weeks of under-performance, recording a 3 week high, which was expected. Despite Fridays explosive move, bullish momentum lags the peak momentum of 2 weeks ago, and thus bullish momentum continues to be worked off, and likely still needs more time to complete. Volume exploded on Friday in anticipation of the tax reform passage in Congress. With a multi-month low in Big Block/Vol, it seems the “little guy” is piling into stocks at these nosebleed levels. To illustrate the lack of stocks participating in the rally, — which penetrated our upper band of SPY 267 (actual high 267.56) — stocks making 52 week highs fell to a 4 month low. Our expectation is for 1 – 2 more weeks of mostly sideways trading while momentum continues to dissipate, taking us close to year end. When the break finally comes expect solid Fib support at SPY 255.08, 247.34 (strong).
    Gold
    Spot gold traded to 1236 — 1 buck under our maximum 1237 — and then bounced with a strong rally, as a major cycle low came due, closing the week 1255.70, over the 55 week mvg avg 1254.24, failing to stay under the required 3 weeks to turn the market bearish. The market is clearly going higher, but first some consolidation to spot 1248 – 1239 (GLD 118.60 – 118.36) is likely. Basis the Weekly chart, spot gold is just a few weeks of a “life cross” (fast 89 line crossing over slow 89 line) after 3 years. After a multi-month low relative to bullion, the XAU led the market higher, with a 5 month high in volume, and further strengthening Upside/Downside volume. XAU Fib resistance 84.37.
    Dollar
    A quiet week, with UUP unchanged 24.43. Longer term, the Dollar remains bearish under our Weekly 89 line (24.56).

  • Stocks, Gold & Dollar Commentary December 11, 2017

    Stocks
    The New Economy stocks have under-performed the Old Economy for two consecutive weeks, with the sector recording a 6 week low. With the holiday season favorable for stocks, our call for a range-bound market (SPY 267.00 – 254.45 (actual high 266.80) still stands. The powerful bullish momentum is now being worked off, which likely needs a few more weeks, takes us into the Christmas week. Reduced world-wide central bank liquidity to the tune of 1 trillion dollars is something markets don’t seem to be anticipating, will be a reality check going into 2018.
    Gold
    We couldn’t have been more wrong with our immediate bullish call on gold. Heavy continued paper selling drove the metal $32 lower, with spot settling 1247.60, under the 55 week mvg avg (1254.21). Maximum downside is spot 1237, as we’re within a time frame for a major cycle low. Spot 1286 is formidable resistance (GLD 122.56). The shares fell over 3% (XAU 76.93). Stiff Fib resistance 84.37!
    Dollar
    The Dollar (UUP) traded 1% higher, with small incremental moves each day, but still within the range (bound by UUP 24.60 – 23.66). Continued sideways range trading is expected. Longer term, the Dollar remains bearish under our Weekly 89 line (24.56).


  • Stocks, Gold & Dollar Commentary December 4, 2017

    Stocks
    The extremely over-bought New Economy stocks mini-crashed last week, falling 3%, while the Old Economy stocks raced to new highs, tacking on 2%, creating a disparity of 5%, an amount rarely seen in the stock market. The unusual out-performance by the New Economy these many months, was the main reason we could not see a calamitous fall in stock prices. This situation may now have changed and needs to be watched closely. However, with the blow-off in the general market, powerful momentum now needs to be worked off, which can take anywhere from 3 to 5 weeks, and into the holiday season, which has traditionally been stock friendly. Therefore, stock should trade range-bound with SPY 267.00 to 253.84 as the boundary. However, with the markets giving little credence to about 1 trillion dollars in reduced liquidity likely coming down the pike in 2018, stocks may finally be in for a much rougher ride than most anticipate.
    Gold
    Spot fell $8, closing 1279.60, as cartel paper selling overwhelmed the gold market the first 4 days, taking GLD to the 89 line, where it held to stage a strong rally to close out the week. Gold is ready to go higher, (with GLD resistance 124.55) as the Daily ADX approaches “big move” territory with a 10 handle. The shares fell in sympathy. Bullish Momentum Divergences are now in place complementing Bullish Upside/Downside volume. The 55 week mvg avg is 1254.33, above spot 22 weeks in a row. A strong move-up in the bullion price will soon see a “life cross” as the fast 89 line crosses over the slow 89 line in a bullish configuration on the Weekly chart.
    Dollar
    The Dollar (UUP) was little changed (24.17) and should trade in a narrow range, bound by UUP 24.60 – 23.66 for several more weeks.


  • Stocks, Gold & Dollar Commentary November 27, 2017

    Stocks
    Defying gravity, stocks ran ahead 1% last week on the smallest range and lightest volume for the year. The New Economy sector continues to vastly outperform the faltering Old Economy making it extremely overbought and likely ready for an immediate pullback. Bullish momentum improved last week, and now another week or so are needed before any significant correction can take place. Breadth and Upside/Downside volume remain bearish. Failure to pass the new Tax plan in the Senate, may very well be the “trigger” for a major sell-off. 
    Gold
    The cartel smashed gold to start the week, as millions of paper ounces were indiscriminately thrown at the market.
    Solid physical buying stepped in as GLD approached the Daily 89 line which had held the price for the prior 21 days.
    Spot closed the Thanksgiving week 1287.90, almost back from where it started, and has now closed 21 weeks above the 55 week mvg avg 1253.86. The shares sold off in sympathy early on, but closed actually slightly higher on the week, as Upside/Downside volume (though very light) continued to show improvement, boding well for the coming bullish move. For the first time in 7 weeks the shares outperformed the metal.
    Dollar
    The Dollar fell out of bed as the week ended, breaking UUP support 24.17. Actual low 24.10. Choppy, sideways action is expected for several more weeks.


  • Stocks, Gold & Dollar Commentary November 20, 2017

    Stocks
    Stocks had there most significant selloff in months, falling 1.6% from the high on Nov 7. With the New Economy stocks continuing to outperform the General Market it’s highly unlikely a correction on the magnitude greater than 5%, at this time is likely. With the market barely 1% from the highs, Breadth has faltered to extreme levels with new lows exceeding new highs on 2 days last week. For the Thanksgiving week — after some initial weakness — we will typically see a bounce-back rally as we approach the holiday season. SPY Fib support 250.45 – 248.22 (strong).
    Gold
    The metal closed $18 higher on the week (1293), after spending 21 days stuck in a $20 range — the tightest range in years. All the while — with the cartel hammering the paper market with millions of paper ounces sold — GLD held support at the Daily 89 line. Gold seems on a bonafide breakout, supported by the shares which now show 10 weeks of bullish Upside/Downside volume, as well as a classic Bullish Weekly Squat on the smallest Weekly range in memory. GLD Fib resistance 124.55 – 126.49. XAU Fib resistance 84.95.
    Dollar
    The Dollar was weak, falling close to Fib support UUP 24.28 – 24.17. Actual low UUP 24.32.


  • Stocks, Gold & Dollar Commentary November 13, 2017

    Stocks
    A minor setback for stocks last week, with continued outperformance by the New Economy stocks, which continue to mask the continued deterioration in the overall market, as evidenced by 9 week lows in 52 week highs and 12 week highs in 52 week lows. – the combination rarely seen before. In addition our Upside/Downside volume studies have weakened for 7 consecutive weeks, along with Triple Bearish Momentum divergences. When the break finally comes it will be huge. SPY Fib support 250.45 – 248.22 (strong).
    Gold
    Bullion had a positive minor upweek, (1274.90) but the real story was positive Upside/Downside volume on the shares, and another Bullish Weekly Squat, despite the flat close on the week. XAU Fib resistance 85.33 – 88.58 (strong). 55 week mvg avg 1252.48.
    Dollar
    The Dollar (UUP) failed on its 3rd Weekly close (24.54) over the 89 line, and thus has not mitigated its bearish posture. A pullback to UUP 24.28 – 24.17 is likely before another attempt to clear the Weekly line.