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  • Stocks, Gold & Dollar Commentary October 7, 2019

    Stocks
    Stocks had a wild week, collapsing 4.6% from the Tuesday high to the low on Thursday, (gapping under, and then back over, our two 89 line trendlines) staging an impressive rally to end the week just slightly lower for the 5 days. (SPY 294.35).  The big takeaway: Despite the New Economy sector recording an 18 day low against the Old Economy sector one week earlier, the New Economy stocks bounced back, and registered all-time highs on Friday, when comparing the two sectors. For this reason, a market crash is ruled out at this time, and we should only expect a fairly modest correction, as we head to any potential low (max SPY 263.77) into next year, as the trade war plays out, and the election season heats up. Just ahead SPY Fib resistance 295.68, 297.42.
    Gold
    The metal crashed to a major low on Tuesday (spot gold 1458.60) then traded up to 1515 on Friday, on news of a rapidly softening economy and tepid jobs report, closing the week 1504. The XAU made a 9 week low, on a 10 week low in range, generating a Bullish Weekly Squat, which should take the market higher (but not new highs just yet). Bullish Momentum divergences needs to form, and another 3 weeks of choppy sideways trading is the preferred scenario, with a high day expected October 16/18. Spot target for gold remains 1670. GLD res 143.91, GDX res 28.87, GDXJ res 40.98, SLV res 16.86, SIL res 30.88.
    Dollar
    The greenback made a stab at our max projected high UUP 27.16. Actual high 27.17, then fell to close 26.96. A 26.85 print breaks an enormous rising wedge formation with an initial target UUP 26.59. Fib support UUP 26.50 (strong).

  • Stocks, Gold & Dollar Commentary September 30, 2019

    Stocks
    Stocks continued its correction, off the Bearish Weekly Squat, into good Fib support (SPY 293.08). Actual low 293.69 late Friday, before bouncing late, closing 295.40, netting less than a 1% decline for the week. The big takeaway: The New Economy sector weakened — playing catch-up on the downside — producing an 18 day low when compared to the Old Economy. We’ll be looking for continued under-performance as the market bounces, over the next 1/2 weeks, as Bearish Momentum Divergences show up. Expect a minor bounce from SPY 293 Fib support. A Weekly close under 292.84 should see a sharp decline to 287.75 (strong Fib support). SPY Fib resistance 299.74.
    Gold
    Spot gold ended the week $20 lower, after wild swings from 1536.60 to a Friday low 1485.90, settling 1496. The gold shares rallied into Fib resistance early in the week, but followed bullion down, ending nearly 4.0% lower on the week, with XAU closing 91.07, down nearly 11.0% from the high 5 weeks ago. This correction was expected, and should be nearly spent. An important PM low is due next week (Oct 1/3). Maximum downside for spot is 1467 – 1465. A number of the individual stocks generated Bullish Daily Squats on the Friday sell-off, as well as the SLV. GLD sup 137.77, SLV sup 15.66, GDX sup 25.52 (all strong!).
    Dollar
    The shortage of Dollars in the repo market, apparently affected the availability of the greenback in international trade, causing a spike in the UUP to new all-time high ground (UUP 27.06). Maximum upside UUP 27.15/27.16. A 26.77 print will break an enormous rising wedge formation going back to June 26. Fib support UUP 26.47 (strong).

  • Stocks, Gold & Dollar Commentary September 23, 2019

    Stocks
    The market finally succumbed to serious selling pressure, on the back of a Bearish Weekly Squat, after probing for new highs — but falling short — on Thursday, finally losing less than 1% on the week. While all of our technicals remain solidly bearish, the big takeaway: The resilience of the New Economy sector when compared to the Old Economy, coming within a fraction of new highs. While this doesn’t rule out a good correction, it takes off the table a market crash at this time. We expect a continuation of the correction, on the back of another Bearish Weekly Squat, which should take SPY to good Fib support 293.08. We expect about 3 more weeks of choppy, range trading, with stocks becoming vulnerable to a bigger down-side move around October 11/14, when Bearish Momentum divergences set in, and an important cycle high is due. It is critical to see how the New Economy sector behaves during this period. A Weekly close under SPY 292 will turn our 89 line trends lower.
    Gold
    As mentioned last week, gold is going through its September correction with a lot of volatility and two-way trading. Starting on Monday from a high of 1513, to what may turn out to be the cycle low for the period, 1482.70 on Wednesday, spot rallied to close on the highs Friday 1517.70. The gold shares out-ran the metal, gaining nearly 6%. (XAU 94.60). Our cycle low is projected for Oct 1/3, so we expect more of the same, over the next few weeks. Silver has under-performed recently, but will start to close the gold/silver ratio on gold’s move to spot 1670.
    GLD sup 137.77, GLD res 143.92, SLV sup 15.66, SLV res 17.76, GDX sup 25.52, GDX res 28.87, 29.38.
    Dollar
    The greenback chopped in a narrow range (UUP 26.86 – 26.72) over the 5 days, closing near the highs (26.83).
    With interest rates heading for the zero-bound, the Dollar should break the uptrend, with a Fib target 26.47.

  • Stocks, Gold & Dollar Commentary September 16, 2019

    Stocks
    Under a constant barrage of positive news on the trade front, including a delay of tariffs and a potential interim trade deal, stocks gained 1.2%, pushing SPY to barely new all-time highs (302.46). The Transports still remain 7% off their highs, and the New Economy sector has not reclaimed new high ground. We allowed for the possibility of new highs, but with a Bearish Weekly Squat having formed, and with stocks over-bought, a decent correction should follow, with SPY 293.08 as solid Fib support. While a minor low is due around September 18, a more important low comes in October 2/4. Despite new highs, our ADX is still low (in the 18 range), and unless last weeks rally is part of a new leg up, the range-bound market we foresee over the next 3 weeks, will bring ADX close to “big move” territory. A break under SPY 291.42 (convergence of our two 89 lines) will turn trends sharply lower, as we head into the October/November time frame.
    Gold
    The metal and shares are going through the September correction, with the shares leading the way, having corrected 12.6%. Spot gold made its high September 2 at 1557.70. On September 11 it made its low print at good support 1484.10. A sharp rally to 1525 was followed by a weak Friday close 1488.40. Potential low for spot 1465. GLD Fib support 137.77. We expect the volatility to continue in a two-way market until a cyclical low on October 1/3. Gold has still not fulfilled its near-term price objective 1670, but should do so after the correction runs its course, in the October/December time frame. GDX Fib support 25.52. SLV Fib support 15.66. Longer term Monthly resistance levels for the PM’s: GLD 153.15, GDX 33.63, 46.37 SLV 26.19, 34.63.
    Dollar
    A volatile week for the greenback ended with a minor loss (UUP 26.72). After a recent multi-year high (UUP 27.01) followed by a gap-down day and dead-cat bounce, the dollar should be heading toward the

  • Stocks, Gold & Dollar Commentary September 9, 2019

    Stocks
    Stocks took out the upper boundaries of the trading range — and rallied 1.8% on punk volume — on hope that a trade deal will be forthcoming at the next scheduled meeting between the US and China. Last weeks rally makes it possible SPY may touch new highs, (302.23) although doubtful — but overall our outlook has not changed — as long as the DJTA does not confirm the move. Other technicals remain the same: Weak market Breadth, bearish Momentum divergences and Upside/Downside Volume and lackluster New Economy leadership point to a range-bound market with initial Fib support SPY 291.43. A cycle low day is due September 16/18. Weekly close under SPY 290 turns trends lower. Fib support 275.66 – 266.09, with the maximum decline of 9% – 12%, at this point in time.
    Gold
    It was a wild week for gold, with spot trading to new highs on Wednesday (1557.70) before tumbling to 1502.40 on  Friday, settling near the low 1506. The gold shares never confirmed the bullion rally, having made their high on August 28 (XAU 102.29), and then fell nearly 8%, closing Friday 94.26, just off the weeks low. A few more choppy trading weeks are needed for the correction to play out, with a tentative low date October 1. Our intermediate term spot target remains 1670 after the correction is over. GLD Fib support 137.77, GDX Fib support 27.63. SLV Fib support 16.26. Longer term Monthly resistance levels for the PM’s: GLD 153.15, GDX 33.63, 46.37 SLV 26.19, 34.63.
    Dollar
    The greenback made new multi-year highs as the Labor Day weekend came to a close (UUP 27.01) but could not hold the gains, closing lower by Friday’s close (26.77). A Weekly close under 26.38 will turn trends lower. UUP Fib support 26.49, 26.28.

  • Stocks, Gold & Dollar Commentary September 2, 2019

    Stocks
    Stocks rallied 2.8% last week, gapping over our 89 line trendlines, on Thursday, turning them bullish — on Trumps tweet that China wants to make a deal — but its not likely to last. With SPY printing 294.24 on the open on Friday, and churning without making further ground, a bearish “3 drives to a top” formation formed (294.15 8/13, 293.93 8/22, 294.24 8/30). Lagging market Breadth, bearish Momentum divergences, Upside/Downside Volume and failing New Economy leadership, point to continued choppy trading bound by the markets recent range (295 – 281) until the resolution to the downside, after several more weeks, as the market fills out the right shoulder of a bearish H&S topping formation. The battle will continue to wage around our 89 lines, until finally resolved to the downside. A Weekly close under 290 will turn trends bearish again. Maximum decline envisioned at this point in time 9% – 12%, with SPY Fib support 275.66 – 266.09.
    Gold
    The precious metal made its high on Monday (1554), had wide chopping ranges every day, before finally closing near the low for the week (1516.40) settling 1520. The top on the shares (XAU Index) came on Wednesday at 102.29, finally cracking the century mark on a 3 year high. Our projected high for spot (1670) was not reached on this bull move, which started on July 1 at spot 1382, and will now have to wait until the correction runs its course through September, likely 3 – 5 weeks. GLD Fib support 137.77, GDX Fib support 27.00, SLV Fib support 16.00. The gold/silver ratio has dropped to 83 from 92 in about a month, on the way to 60 on the next run-up in the metals. GLD Monthly Fib resistance 153.15. GDX Monthly Fib resistance 33.63, 46.37. SLV Monthly Fib resistance 26.19, 34.63.
    Dollar
    A surprise, mad scramble for Dollars pushed the greenback to new multi-year highs, with UUP touching 26.92, totally reversing the “reversal down day” the prior week. It will now take a Weekly close under UUP 26.35 to turn dollar trends lower. UUP Fib support 26.48.

  • Stocks, Gold & Dollar Commentary August 26, 2019

    Stocks
    Stocks attempted to maintain a bullish posture by gapping over our 89 line trendlines, and holding above SPY 290 for 4 days, before the renewed “tit for tat” escalating trade war aborted the rally, and crushed the market with nearly a 3% decline, with SPY closing 284.85. However, with the New Economy sector making new all-time highs vs the Old Economy two days last week, a market crash is ruled out at this time. Instead, we see a maximum decline in the 9% to 12% range (SPY 275.66 – 266.09) followed by months of sideways action, as the right shoulder fills out, and consumers get the liquidity they need in a “final hurrah” with massive refinancing, as interest rates approach the zero bound. It will take a Weekly close over 290 to turn our trends bullish again.
    Gold
    The cartel kept the metal at bay for most of the week, as it attempted to stay over 1500, but threw in the towel, as the trade war escalated on Friday, and Powell indicated he was prepared to continue to cut rates, although he saw the Fed’s power as limited. Gold spiked $39 off the low, and closed 1528, the highest close since April 2013. The market is approaching a cyclical high day next week, (August 27-28) and a correction is due, especially if the strident rhetoric dies down on the trade front. The gold shares restored its leadership with the highest close (XAU 97.78) since August 2016. Silver had its highest close (SLV 16.35) since September 2017, and will be looking to lower the gold/silver ratio to about 60 over the next several months. GLD Monthly Fib resistance 153.15. GDX Monthly Fib resistance 33.63, 46.37. SLV Monthly Fib resistance 26.19, 34.63.
    Dollar
    A big reversal down day (UUP 26.77 to 26.51) as Powell indicated lower rates lie ahead. A break of UUP 26.30 on a Weekly basis will target 25.77.

  • Stocks, Gold & Dollar Commentary August 19, 2019

    Stocks
    The week was characterized by huge volatility in both directions. First bouncing to just shy of Fib resistance 294.59 (actual high 294.15). Then falling 4.0% to 282.39 — gaining half back — with Friday’s rally to close 288.85. The net result was a Weekly close under 290, turning our two 89 line trends bearish. The culprit: The U.S. Treasury 2-10 yield curve inverted, which history tells us is infallible in predicting recessions. But, as the Fed continues to lower interest rates, this time may be different, with its firepower being limited with only 3 1/2 points to zero. It will take a Weekly close over 290 to get bullish, which we are likely to see an attempt early in the week. SPY Fib resistance 291.46, 293. SPY Fib support 275.66, 266.09, 249.30.
    Gold
    Repeated attempts, by the cartel, to keep gold from a Friday close over 1521 was successful, but nevertheless 1513.20 was the highest close since April 2013. High print for the week 1535.30 – low print 1479.30. There remains only about 7/8 trading sessions (August 27-28) before an important cyclical peak is due for the precious metal, with a correction likely during September. Our short-term upside target remains 1670. The gold shares made its high 8 days ago, and now lag bullion, when compared to the metal, with a 5 week low. Silver is starting to show some resilience to its huge sell-offs in the past, and should start to lower the gold/silver ratio to 60 by the end of the year. GLD Monthly Fib resistance 153.15. GDX Monthly Fib resistance 33.63, 46.37. SLV Monthly Fib resistance 26.19, 34.63.
    Dollar
    The greenback bounced less than 1%, but on a Monthly basis still appears to be fulfilling the classic “3 drives to a top” formation, discussed last week. A Weekly close under 26.26 turns trends bearish with an initial target 25.77 Fib support.

  • Stocks, Gold & Dollar Commentary August 12, 2019

    Stocks
    Stocks fell 7.9% from the July 24 high last week – but you wont find it on the S&P chart. It is hidden by the collapse Monday by the e-mini futures which fell equivalent to SPY 278.39. The subsequent rally by the emini carried SPY to 288.04 by Tuesday’s close, a full 10 points higher. Stocks had every reason to turn our trends bearish with a Weekly SPY close under 289, but the spectacular rally, led by the new Economy sector on Thursday, brought SPY comfortably above our bearish 89 line trendlines, and in the process, significantly improved Breadth, so another strong bounce is likely before any immediate downturn. A bullish Weekly Squat on a 6 month plus high on volume further supports a rally. SPY Fib resistance 294.59. A Weekly close under SPY 290 turn trends bearish. Ultimately expect to see SPY Fib support 266.09, 249.30.
    Gold
    Spot gold surged $57, closing Friday 1497.50, after trading to 1510 over 3 days, finally held under 1500 by a heavy barrage of paper shorting by the cartel. Our short-term target for gold remains 1670, but will it do it by August 27, our projected date for an important top — or after the September correction?  The gold shares (XAU) traded to the highest level since October 2016 (98.78). Silver finally broke through overhead resistance (SLV 15.73) closing 15.89. Silver should now take the lead and start to close the gold/silver ratio, with an initial target of 60 by the end of the year. GLD Monthly Fib resistance 143, 153.15. SLV Monthly Fib resistance 26.19, 34.63. GDX Monthly Fib resistance 33.63, 46.37.
    Dollar
    The greenback fell less than 1% (UUP 26.46) off an 11 year high recorded on August 1 (UUP 26.79) in what is looking like a classic “3 drives to a top” (March 2015, January 2017, August 2019). A Weekly close under 26.22 turn trends bearish with an initial target UUP 25.76 Fib support.

  • Stocks, Gold & Dollar Commentary August 5, 2019

    Stocks
    Stocks fell sharply for 5 straight days, almost reaching our projected decline line of 4% – 6%, (actual decline 3.9%) in the first salvo of a much larger sell-off to come. SPY now sits in a broad area of support, having touched our two 89 line trendlines which have merged. While the stock sell-off was broad-based, led by the New Economy sector, which registered an 18 day low, it paled in comparison to the 10 year Treasury, which collapsed 6% in one day, the sharpest decline in 4 years, to 1.832%. Over the next week, or so, we expect a good bounce, on light volume, to take SPY to 295.23 – 297.90, before the onset of a more protracted decline, which will start with a Weekly close under SPY 289, turning our trends lower.
    Gold
    Another wild week for the precious metal, which ranged from 1433 to 1400 (after the Fed cut rates 1/4 point) back to 1448, closing 1440.20, the highest close in 6 years. Spot gold is projected to reach 1670 (off the H&S bullish bottom formation) by the Fall 2019, at which point a major correction is likely. GLD Monthly Fib resistance 143, 153.15. The gold shares (XAU) surrendered leadership (at least for 1 week), after dropping 7% mid-week (XAU low 86.01) before snapping back to close the week with a minor plus sign. GDX Monthly Fib resistance 33.63, 46.37. Silver gave ground vs gold, falling slightly. The bull market in silver is underway, and we expect spectacular gains ahead. Fib resistance very near term 15.73. Long term based on our Monthly chart, SLV Fib resistance 26.19, 34.63. As discussed last week, the gold/silver ratio, as a first major stop, will drop to 60, as the bull market gets underway. With gold reaching 1670, at a gold/silver ratio of 60, silver would trade to 27.83.
    Dollar
    On the news of the Fed rate cut, and with the world scrambling to repay debt in Dollars, the greenback spiked to a 31 month high (UUP 26.79), then came off by weeks-end, only up slightly (UUP 26.59). Weekly close under 26.15 to turn trends lower. UUP 25.76 strong support.