The big takeaway: An important first sign, we’ve been waiting for, of an impending top emerged last week, as the New Economy stocks registered 8 day lows vs the Old Economy in closing out the weeks trading. Breadth continued to deteriorate, as NYSE 52 week highs fell to 4 month lows, with the difference between highs/lows a miniscule 15 stocks. With volume continuing weak through the entire 6 week rally, our Upside/Downside numbers fell to their worst levels, with bullish momentum finally turning negative. A modest decline is likely, followed by a bounce into the Thanksgiving holiday, to be followed by a major high around December 2/4. Initial SPY Fib support 308.65. Strong Fib support 301.88. Fib resistance 313.10.
After a spot gold high of 1557.70 on September 4, gold has gone through a 3 month consolidation, and is setting up for a final decline in early December, for its typical 6 month low.The most recent spot low of 1444.90 may be tested. If broken, downside targets 1435 with max 1419 (low probability) on all out paper raid wash-out. With gold leading the downside, SLV target 15.37. We expect silver to lead rally. The silver miners (SIL) show a strong bullish divergence when compared to the metal. From there a multi-week rally should start until end of January with 1670 spot objective. GLD resistance 141.96, GDX resistance 28.87, SLV resistance 17.76, GDXJ resistance 40.98, SIL resistance 30.87. Spot gold 55 week mvg avg 1342.17.
In an abrupt about-face, the greenback bounced back to recent high (UUP 26.92), closing on the highs. UUP resistance 27.00. A Weekly close under 26.68 turns our 89 line trends lower, with 26.30 objective.