Stocks gained less than 1% last week, (317.32) holding firm near all time highs (SPY 318.67). as Phase One of the trade deal was signed. In recent weeks, stocks have gained 7% on expectations the deal would be completed. With no immediate tariff relief, for the economy to accelerate, capital spending needs to improve, but there’s too much uncertainty for that to happen, so the only game in town, to keep the market levitating, is the daily, massive injection of Fed liquidity. Volume ballooned to a 9 week high creating a Bearish Weekly Squat, while an important cycle high was due (Dec 13). However, the important takeaway was an all time high, both, in the New Economy sector — and also, vs the Old Economy, which means, we only expect a correction in the 3% range, before another attempt at new highs. Fib support 312.01, 309.67.
As the trade deal was announced, the cartel slammed gold with paper, taking the metal down $22.50 (1487.70 to 1465.20) before closing Friday 1476.20. Nevertheless, at a 6 week closing high. However, the takeaway was the strength in the shares which gained 4.5% to a multi-year closing high. (XAU 100.28), led by the juniors GDXJ and SIL, which crossed over breakout levels. Breakout levels remain for GDX 27.84, GLD 140.60, and SLV 16.50.
The greenback (UUP) closed under our 89 line trendlines (26.65), turning trends bearish, and are headed for 26.30 and 25.81.