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  • Stocks, Gold & Dollar Commentary October 28, 2019

    Stocks
    With new all-time highs in the New Economy sector, (and, also when compared to the Old Economy) as a very mixed earnings picture pour in, the most the bears can expect is normal corrective action over the next couple of weeks, as stocks work toward an immediate high, based on a “3 drives to a top” (SPY 302.63) bearish formation. The algos were in control last week, gaining 1.5%, though muted, on the lightest volume in nearly a year, coupled with the smallest range in 5 months, creating a classic Bearish Weekly Squat. Bullish Momentum has been degraded sufficiently for a decent correction to take place. Upside/Downside Volume and Breadth remain bearish. SPY Fib support 297.97. A Weekly close under 294.07 will turn our 89 line trends bearish.
    Gold
    After trading down to 1481 to start the week, the metal came back surprisingly strong on Friday, to rally to 1518.70 (on generally weak economic news) shy of our 1521 breakout level, settling 1504.50. The shares followed through on back-to-back Bullish Weekly Squats, continuing to lead the metal, gaining 3.3%, on a 3 week high on trading volume. With Upside/Downside Volume hitting 8 week highs, a pause in the bull move is likely. Spot silver gained 3.0%, outpacing the yellow metal. GLD resistance 143.91. GDX resistance 28.87. SLV resistance 17.76. Spot gold intermediate term price objective remains 1670, with silver touching 26.59, as the gold/silver ratio drops to the mid 60′s.
    Dollar
    After hitting our downside target UUP 26.55 (actual low 26.54) the greenback bounced to 26.75 by Friday. Sideways, choppy trading with an upside bias is expected, with a maximum UUP 26.89 over the next few weeks. Look for an eventual close under 26.55, for a drop to strong Fib support UUP 25.81.

  • Stocks, Golds & Dollar Commentary October 21, 2019

    Stocks
    Crosscurrents gripped stocks last week on the lightest volume in 3 months. The net result was a fractional gain or loss depending on the index. A new high in daily Bullish Momentum, as well as new highs in the New Economy sector means more sideways chopping action is needed for the bullishness to be degraded. On the other hand, our Upside/Downside Volume studies along with Market Breadth maintained strong bearish readings. In the short term expect the market to move lower, primarily based on the failure of the British Parliament to approve the Brexit agreement, instead seeking an extension. This should roil the market in the early going. Fib support should show up SPY 295.38 – 293.36. A Weekly close under SPY 293.30 will turn our 89 line trends bearish, with the market seeking strong Fib support 287.10. Not surprising, with all the crosscurrents, the cycles inverted with the low day becoming the High Day on Oct. 17. Low Day expected Oct. 25/28. Longer term we expect to see SPY 265 – 263, but only after a breakdown in the New Economy sector.
    Gold
    The metal spent most of the week on the downside, with the narrowest range in 9 weeks, but managed an up-close by weeks-end (spot 1490). The main takeaway, however, was the reclaiming of leadership by the shares, with XAU gaining 2% (90.53). Coming off back-to-back Bullish Weekly Squats, and with Bullish Weekly Upside/Downside Volume numbers, along with Bullish Momentum divergences, the stocks are primed to move higher. GDX resistance 28.87, 30.00. GLD resistance 143.91. SLV resistance 16.86. Spot gold needs a 1521 print to continue its bull move. Intermediate term target for spot gold is 1670. Silver is ready to out-perform gold, and with the gold/silver ratio dropping into the mid 60′s, expect spot silver to touch 26.59.
    Dollar
    Considering the recent 4 month Dollar rally, last weeks drop – creating a 2-month island – was ominous though only down 1% for the week, hitting our downside target. (UUP 26.55). Strong Fib support 26.29.

  • Stocks, Gold & Dollar Commentary October 14, 2019

    Stocks
    To start the week, stocks broke badly on rumors of a cancellation of trade talks, then reversed with unprecedented volatility (on news the meeting would take place) to gap over our 89 line trendlines, reaching major Fib resistance (298.74), then falling sharply in the last 40 minutes to close on the lows for the day (296.28). The upshot of the meeting: In return for some modest concessions, most of which were previously offered by Xi, (buying large amounts of US agriculture), Trump agreed to suspend tariffs scheduled to start next week. The markets overall net gain: less than 3/4 of 1% for the week. With new highs in the New Economy sector, (YOY buybacks +39%, most since 2000*) led by Tech buybacks) vs the Old Economy, we continue to believe only relatively modest sell-offs in the near term are the likely scenario. Stocks should find Fib support SPY 292.09, with a low day expected Oct. 17. However, with our Upside/Downside studies remaining bearish, and Bearish Momentum divergences completing its set-up, a break under our trendlines should follow, with Fib support at SPY 287.10. Sometime in 2020, we expect to see 265 – 263.
    *Bank of America, Jill Carey 
    Gold
    In keeping with our scenario for more choppy trading, the metal started the week under pressure, with a spot low print 1488.20 on Tuesday, rallying to 1516.50 by Thursday, then under a barrage of paper selling during US/China negotiations, fell sharply to 1473, before closing Friday 1489. A spot gold print 1521 will constitute a break-out. The shares were weaker compared to bullion, but registered back-to-back Bullish Weekly Squats in a fake-out week (higher high, lower close). With GDX trading into our 89 line trendlines, we expect a strong bounce with our Weekly Upside/Downside volumes turning bullish. With more time left for sideways trading still likely, we’re allowing for an alternate scenario for GDX of additional downside. GDX Fib support 25.51 (strong). GDX resistance 28.87, 30.00. GLD resistance 143.91. Silver is outperforming gold, and should continue to do so when the metals start the next bull phase. With a spot gold target of 1670, spot silver should trade 25.69, as the gold/silver ratio shrinks to 65. SLV near term resistance 16.86, 17.79.
    Dollar
    The greenback broke the enormous rising wedge formation, (UUP 26.85), its been holding since June 25, closing 26.82. Initial downside target 26.59 – 26.54. A Weekly close under 26.54 turns 89 line trends lower, with strong Fib support 26.29.

  • 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.