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  • Category Archives Commentary
  • Stocks, Gold & Dollar Commentary April 1, 2019

    Stocks
    Stocks closed out the week on an up-note, after an early, relatively minor decline of 2.7%, not quite reaching SPY support (276.90). Actual low 277.64. Against the back-drop of an about-face by the Fed — halting rate increases this year — traders are emboldened to push stocks ever higher, despite weak economic news. With four consecutive weeks of shrinking ranges, an unsatisfied Bearish Weekly Squat, and the slowing of the New Economy sector, stocks are ready to undergo a decent correction — after early week strength. High day April 2/3. Strong bounces can be expected off 274.80, with 259.83 strong Fib support. SPY Fib resistance 283.57.
    Gold
    The metal had a rocky week, first showing strength, trading into spot resistance 1324, then declining steadily to 1286 (GLD 121.90), before settling 1292.30. This is in keeping with our forecast for a long period of consolidation, prior to a mid May breakout, and the continuation of the bull market. For the second consecutive month, the gold shares were on the cusp of a significant breakout with a Monthly close over XAU 78.45, only to be thwarted on the last week of the month (closing 76.36 from 3/27 high 79.89). The shares ended down around 1%, but still showed relative strength compared to bullion. Spot gold strong support 1281 – 1271. GLD Fib resistance 125.89. GLD Fib support 119.62.
    SLV Fib resistance 14.74, SLV Fib support 13.90. Spot gold 55 week mvg avg 1266.72.
    Dollar
    The greenback was strong, (UUP 26.03) gaining 1%, and refusing to close under our 89 line trendlines that are merging (25.71). A test of 6 month high is likely (UUP 26.12).

  • Stocks, Gold & Dollar Commentary March 25, 2019

    Stocks
    Stocks took a drubbing Friday — yet fell less than 1% for the week — after spiking to new recovery highs, (SPY 287.44) on bad economic news out of Germany. The result: A collapse in bond yields, which saw the 10-year Treasury yield trading below the 3-month yield. This inverted yield curve has preceded recession on seven out of seven occasions since 1969. With the New Economy sector closing higher on the week — and registering 7 month highs vs the Old Economy – no immediate collapse of stock prices is in sight, just yet. A relatively minor decline from these levels should find Fib support SPY 276.90 – 274.80, followed by a bounce into early April, which should put in the final high, provided the New Economy starts to show weakness, which is way over-due. Technically, with the strongest volume in 9 weeks, a Bearish Weekly Squat formed and will project lower levels.
    Gold
    Gold continues to chop around, ranging from a spot low 1298 early in the week, followed by a rally to 1320 resistance, where cartel paper selling drove spot lower, to 1302.50, before bouncing to settle 1313 on Friday. Spot gold strong support 1281 – 1271. The PM’s remain on track for a break-out around mid May, with a spot gold strong close over 1360. GLD Fib support 119.62, GLD Fib resistance 123.99. SLV Fib support 13.90. SLV Fib resistance 14.83. The shares (XAU) tacked in 1.7%, after trading down 1%, and continue to lead the metal. To signify the bullish break-out for the shares is underway, look for an XAU Monthly close over 78.45.
    Dollar
    After threatening to break under our 89 line trendlines mid-week, the Dollar held UUP 25.57 and bounced to close  unchanged (25.80). A strong close under UUP 25.57 will start a bear phase.

  • Stocks, Gold & Dollar Commentary March 18, 2019

    Stocks
    From the high the previous week (SPY 281.87), stocks added another fractional gain (282.38), to set new recovery highs, breaking through Fib resistance, to extend the gains to 20%, in a stunning 10 week rally that began December 26. In no sign of a let-up, stocks were led higher by the New Economy sector which recorded a 6 month high vs the Old Economy. However, while stocks were hitting new recovery highs, in a troubling sign for the economy, the DJ Transportation Index, was going through a near record 11 consecutive losses, the longest in 47 years. With a high day projected for March 15/18, another mild sell-off is likely with near term targets SPY 275.66 – 273.97, followed by another rally to challenge the highs. As long as the New Economy sector is out-performing, we expect only relatively modest declines for the market, despite our Upside/Downside Volume and Momentum studies remaining bearish. Taking another look at the Weekly chart, you can make the case that the 10 week rally, brought stocks to the neckline, leaving little room for further gains, in an enormous H&S top formation.
    Gold
    The metal continues to trade in choppy fashion, getting slammed early in the week — finding support spot 1290 — and rallying to close out the week 1302. More sideways trading is likely for a few more weeks, with rallies aborted 1320 – 1330 and strong support spot 1281 – 1271. A strong Weekly close over 1360 (mid May) will indicate the bull move has begun with 1400, and higher, in sight. GLD Fib support 119.62. GLD Fib resistance 123.99. SLV Fib support 13.90. SLV Fib resistance 14.83. The gold shares closed flat, after trading lower, but continued to show relative out-performance vs the metal. Interest has returned to the sector with a 3 month high in volume. GDX Fib resistance 23.21. Look for Monthly close over XAU  78.45 to turn trend bullish.
    Dollar
    The greenback fell 1%, (UUP 25.80) after challenging recent high (UUP 26.12) and appear ready to break below 25.57, and close under our 89 line trendlines.

  • Stocks, Gold & Dollar Commentary March 11, 2019

    Stocks
    Stocks finally had a bit of comeuppance, — falling in line with our Bearish Squats — suffering the deepest drop (3.1%) since the rally started on December 26. A last hour bounce limited the damage to 2.0%. The sell-off was accelerated by a bearish Jobs Report, highlighting the slowdown in the economy, with only 20,000 new jobs created. SPY broke through our downside target 274.62, spiking 200 points lower, before finding a good low (272.46). We expect a high day March 15/18, with strong Fib resistance 278.91. Throughout the sell-off, the New Economy stocks continued to lead the market. We expect this sector to weaken as the bounce peaks out. SPY Fib support 270.84 – 269.60.
    Gold
    The PM’s were under pressure most of the week, with spot gold trading down to 1280.90 on Thursday, $65 off the 1346 high on February 20. The weak Jobs Report sparked a rally, (against the sure-sign of stagflation, with wages growing 3.4%, the fastest spurt in 10 years within a slowing economy) and spot gold rallying to 1301. GLD Fib support (121.49) held, closing 122.84. SLV Fib support (14.17) held, closing 14.41. More choppy, sideways trading for several more weeks is likely, with a challenge, and break-out to new highs end of April – early May. The gold shares (XAU) gained 2.6% after early weakness, and were even higher against a strong Dollar. Spot gold 55 week mvg avg 1264.71. Monthly close over XAU 78.45 turns Monthly trend bullish.
    Dollar
    Holding our 89 line trendlines, the Dollar (UUP) rallied to challenge the recent highs (UUP 26.12) stopping 26.07, before settling 25.99. Look for double-top and break below 25.57 to turn trends lower, and bear trend to begin as gold breaks above 1400.

  • Stocks, Gold & Dollar Commentary March 4, 2019

    Stocks
    Stocks ended the week with small gains led by the New Economy sector, on the lightest volume in 5 months. The market has rallied 19% for 9 consecutive weeks, even against two weeks in a row of Bearish Weekly Squats that should have, but failed to produce a significant correction. The current rally now just about equals the 19% rally from March 89 to August 89 that lasted nearly 5 months. At least in the short term, the Powell Put has done its work and continues to levitate stock prices. But, let’s remember the Bernanke Put never prevented the Great Recession. However, Mother Nature will not eventually be denied, with a big sell-off just around the corner. Joining our bearish Upside/Downside volume studies, are quadruple Bearish Momentum divergences, a lack of new highs in Market Leadership, and a sharp deterioration in Market Breadth. Look for a pull-back to SPY 274.62, followed by a good bounce, then a move down to SPY 268.32 where the battle for the continuation of the bear will be fought. SPY close under 266 will set up for eventual new lows.
    Gold
    The Precious Metals consolidation we spoke about has arrived, with spot gold declining $56 from 1346 on February 20 to 1290 on Friday. Markets generally are sitting in a broad area of support, and good bounces can be expected, but several weeks of sideways trading is needed, before the bull can reassert itself. Look for base-building over the next 8 -10 weeks, readying for a multi-week breakout to begin around end of April which will take gold through 1400. GLD Fib support 121.49 – 119.62 (strong). SLV Fib support 14.17. GDX Fib support 21.26. Monthly close over XAU 78.45 will turn Monthly trend bullish.
    Dollar
    A strong Friday bounce brought the greenback positive for the week (UUP 25.74). Look for a strong close under UUP 25.57 to turn our 89 period trends lower, and a bear trend to begin.

  • Stocks, Gold & Dollar Commentary February 25, 2019

    Stocks
    While we were wrong anticipating an immediate decline, stocks plodded through a holiday-shortened week of sideways trading, seemingly waiting forever for good news on a US/China trade deal, before ending the week with less than a half of one percent gain. It’s obvious, the market has become totally manic, following with the best January in 32 years, after the worst December in 87 years. With all indications abound that the economic back-drop is tanking, (too numerous to mention) the stock market decline is far from over. At a minimum, we expect a 35% decline off the highs. The low cycle day appears to have inverted with a high day now arriving on Feb 22/25. Our Upside/Downside Volume studies remain bearish along with Bearish Momentum Divergences. In addition last week was another classic Bearish Weekly Squat with the smallest range in 6 months, giving us two back-to-back Bearish Squats. SPY Fib support 267.16 – 263.71 (strong).
    Gold
    Spot gold rose $7 on the week, (1327.70) after almost achieving our maximum target for this move (1349). Actual high 1346 on Wednesday 2/20/19. A further consolidation is expected to last, at a minimum, until March 12, for both the metal and shares. A 4 month high in share volume (in a holiday-shortened week), and Weekly Bearish Momentum Divergence showing up, will likely put in a short-term top. GLD Fib support 122.56. GDX Fib support 21.92 – 21.26 (strong). SLV Fib support 14.64. In classic bullish fashion, the shares continue to lead the metal, recording an 18 week high vs gold. Look for a Monthly close over the XAU (4 more days) of 78.45 to turn Monthly trend bullish. XAU Fib resistance 82.12 – 82.60.
    Dollar
    The greenback weakened over the holiday week, but held Fib support UUP 25.65, closing 25.72. Look for a strong close under UUP 25.57 to turn our 89 period trends lower.

  • Stocks, Gold & Dollar Commentary February 18, 2019

    Stocks
    In a choppy trading week, stocks tacked on 2%, primarily on news of a pending break-through on a China/US trade agreement, and have thus gained a remarkable 17% since the bear market low (SPY 233.76) on December 26. However, the strength of this rally is not uncommon. In the two prior bear markets (2000 – 2002 and 2007 – 2009) there were 5 instances of rallies that exceed 17%, with the market continuing to make new lows – so it’s not different this time, at least not yet. It did not take long, but in one week, bullish and neutral sentiment combined (AAII) have actually exceeded the levels attained the week the market was making all time highs.
    With our Upside/Downside volume numbers remaining bearish, triple bearish Momentum divergences taking hold,
    and a bearish Weekly Squat on a 5 month low in range, (ex holiday weeks) the market is now ready for a significant pull-back. SPY Fib support 260.20 – 256.43 (strong). SPY near-term Fib support 266.87. Expect good bounces off these levels, and then significantly lower prices. Low day expected Feb 22/25.
    Gold
    The yellow metal was in corrective mode most of the week, with spot low on Thursday (1302.50) then bouncing strongly to close the week, settling 1321.  The metal sits comfortably bullish above its 55 week mvg avg (1262.35). GLD Fib resistance 125.57. In line with our forecast of PM consolidation, the gold shares traded down 3%, at its worst levels, then rallied to close unchanged for the week. Longer term, we’re in the sweet spot for much higher levels for gold prices – despite Cartel paper gold manipulation -  based on massive Central Bank buying, bullion tonnage moving from West to East, at the same time world production is set to decline, while world-wide mergers are intensifying. GDX Fib resistance 24.23. XAU Fib resistance 82.12 – 86.70. Look for Monthly close over 78.45 to turn Monthly trend bullish. SLV traded to near term Fib support 14.65, closing 14.82. SLV Fib resistance 15.88 (strong). SLV Fib support 14.46 (strong).
    Dollar
    The greenback continued firm, running up against strong Fib resistance (UUP 25.92). Actual high 25.90. Then selling off, closing 25.79. Range trading is likely (UUP 25.92 – 25.31) until stocks break down.

  • Stocks, Gold & Dollar Commentary February 11, 2019

    Stocks
    With an initial 1.4% bounce to start the week, (SPY high 273.44) and within a scant 46 ticks from major Fib resistance (273.90) stocks have tacked on 16% since the bear market low (SPY 233.76), and has collided — and stopped — at the 200 day mvg avg. As pointed out, this is not uncommon for stocks to show extreme strength from a bear market low. In the 2007 – 2009 bear market, from close to close, stocks rallied over 24% from the low. And then went on to make new lows, given the benefit of time. However, what may be different, stocks have exhibited staying power, with the New Economy, compared to the Old Economy, registering 15 week highs. So, while we’re still bearish long term, (our Upside/Downside Volume studies remain bearish and Momentum has started turning negative, as well as Market Breadth) we’re likely in an interlude period, which should last several more weeks before new lows are seen. Despite the fact that every major sector of the economy has lowered forward guidance, what’s needed for the next major leg down, and new lows, is an extreme build-up in bullish sentiment, as stocks meander through this choppy period over the next 6 – 8 weeks. An important low point is due around March 22. Fib Support SPY 258.52 – 253.63 (strong).
    Gold
    Spot gold never traded above last weeks close (1317.50) trading in a $14 range for the week (1316.20 – 1302.60) settling 1313.50. It’s likely with our original price objectives having been met, the PM’s will go through several weeks of consolidation. Maximum spot price on this move 1349. The gold shares, (XAU) while flat on the week, continue to lead the metal registering a 26 week high, despite a firm Dollar. XAU resistance 82.12 – 86.70. Look for a Monthly close over 78.45 to turn Monthly trend bullish. GLD Fib res 125.57. GLD Fib sup 121.81. Silver fell 9 cents, finding good support on the pullback. SLV Fib sup 14.46. Much longer term, as the precious metal bull goes into “over-drive” look for a Monthly gold close over 1378 to trade to 1700, and on the first monetary reset, trade to 2300.
    Dollar
    Dollar action fooled us, reversing the prior weeks decline and bouncing back above our key trend 89 lines.
    Fib res UUP 25.92 (strong).  Range trading UUP 25.92 – 25.31 is likely scenario while stocks don’t break down.

  • Stocks, Gold & Dollar Commentary February 4, 2019

    Stocks
    With the General Market gaining 1.3% last week, led by the New Economy sector (all in the last 3 days, after the Fed took a pause in raising interest rates, and floated good news about a breakthrough in US/China trade talks), stocks have tacked on an amazing 15% from the December 26 low (SPY 233.76). Not uncommon after an initial bear market low. With economic data worsening (almost 20 large, bell-weather companies have lowered forward guidance), it’s likely stocks are close to a terminal point, having reached strong Fib resistance SPY 271.01 (actual high 271.20). Bearish Momentum is finally showing up — a necessary prelude to the coming decline — stocks should enter a choppy, trading period, over the next two weeks, before heading sharply lower. Fib support 253.34 – 251.04 should arrest the initial decline.
    Gold
    Spot gold traded 1326 on Thursday, before pulling back Friday to settle 1317.50, up $15 for the week. The gold shares led the group gaining nearly 7%, with XAU settling 75.91, and firmly establishing strong leadership, recording a 6 month high vs the metal. Daily bullish momentum went off the charts, reaching  a 27 month high. XAU resistance 82.12 – 86.70. Look for a monthly close over 78.45 to turn Monthly trend bullish. GLD res 125.57. SLV ran into Fib resistance 15.07 – 15.12. (Actual high 15.19) before settling 14.92. A brief period of consolidation is likely.
    Trapped shorts for the 4 month period between 8/18 – 12/18 will provide support under the market on any good pullback.
    Dollar
    With the Fed standing pat on interest rates, the Dollar fell slightly, and should start a decline towards Fib support
    UUP 24.68 – 24.32 (strong).

  • Stocks, Gold & Dollar Commentary January 28, 2019

    Stocks
    Stocks emerged from MLK Day, falling 2.2%, then recovered, but failed to exceed the level of the prior weeks close. An improvement in Market Breadth, led by the New Economy sector, will likely give the market a few weeks of staying power. Fifteen days, and counting, of consecutive bullish momentum needs to be “worked off”, which only the passage of time can accomplish. We’re looking for a pull-back to Fib support SPY 254.47 – 252.52 (strong), and then a bounce into early February, before stocks seek lower levels.
    Gold
    Spot gold closed the week at 1303. the highest close since May 18, 2018, and for the fifth consecutive week sits above the 55 week mvg avg (1259.24), and at an 8 month high vs the Dollar. While this bull will not be stopped, stiff Fib resistance should show up GLD 123.86 (spot 1313-1315) from where the breakdown last occurred, and the cartel should vigorously defend this area. The same situation applies to silver, with Fib resistance SLV 15.07 – 15.12 (spot silver 15.82 – 16.00). SLV close over 15.23 turns Weekly trends bullish. Gold shares (GDX) held Fib support (20.45), gapped out of its base on Friday, heading toward strong Fib resistance (21.70). GDX close over 21.82 turns Weekly trends bullish.
    Dollar
    The greenback found stiff resistance on its bounce-back UUP 25.66 (actual high 25.68), then dropped sharply closing Friday 25.44. A bear run should begin with Fib targets 24.68 – 24.32 (strong).