Stocks started the week in corrective mode, declining nearly 2.7% over 3 days, then gaining it all back (but NO new high) as a result of a massive injection of Fed liquidity – through repurchase agreements – totaling nearly $98 billion. The week was finally topped off by a much better than expected employment report. All against a back-drop of a slowing economy and trade war uncertainty. The “fly in the ointment” in the rally, at this time, is the vast under-performance by the transportation index (IYT), which appear to be setting up a Head & Shoulders top. A Weekly close under 187.50 should send all markets following lower. Another high day is due December 12/13. SPY resistance 315.74. SPY support 312.01. Strong support 303.88.
Gold fell 4.30 on the week (1460.20), but failed to reflect volatility, which saw almost a $32 range from 1453.40 to 1484.70. The gold shares (XAU) continued to outperform bullion, closing fractionally higher on the week, and new high for the year vs the metal. In stealth-like fashion, and totally unreported by the financial media, gold has nearly doubled the performance of stocks, – despite fraudulent, massive paper shorting on the Comex* – measuring from December 3, 2018 to December 3, 2019. GLD up 19.5% vs SPY up 10.8%. *“THE COMEX IS NOW EFFECTIVELY DEAD as a mechanism for delivery of physical gold. My sample period started on 12th July 2019, so now encompasses 142 days. NO GOLD IS EVER DELIVERED FROM THE REGISTERED GOLD INVENTORY AT THE COMEX” – Nicholas from GATA Weekly closes for the following will constitute breakouts: GDX 27.84; GDXJ 38.60; SIL 30.42; GLD 140.60; SLV 16.50. Bullion has now been above its 55 week mvg avg (1346.50) for 50 straight weeks.
The greenback (UUP) fell the first 4 days, (UUP low 26.68) then bounced on Friday postponing the inevitable. A Weekly close under 26.71 will turn our 89 line trends bearish, looking for 26.30, then 25.81.