Despite SPY correcting 1.7% from the high (332.95), the New Economy sector outpaced the Old Economy every day last week, strongly suggesting the maximum downside, at this point, is in the 3% to 5% range, before another attempt at new highs. With the Fed expanding its balance sheet to the tune of $100 billion per month, (yes, at the rate of over one trillion a year) it appears to overmatch our bearish technicals, which continue to show weak underpinnings to the bull. To illustrate: Stocks registered 5 month highs in NYSE 52 week lows, as stocks traded to all-time highs. SPY Fib support 323.80, 321.97. SPY Fib resistance 330.85.
It is now over 3 weeks since GLD gapped higher – with the gap never closed - and spot gold reaching 1610 on January 8. Despite attempts to suppress the price with massive paper shorting on COMEX (open interest at an astonishing all-time high 800,104), spot gold closed Friday at a multi-year high 1571.50. The gold shares (XAU) have regained leadership among the precious metals, recording a 3 week high. Spot gold’s short-term target remains 1670. Intermediate term targets for GDX 34.58, GDXJ 50.51, SLV 19.22. Very near term support GLD 145.75, SLV 16.36, GDX 28.17, GDXJ 40.47.
The greenback continued its dead-cat bounce, within its trading range (UUP 26.56 – 25.81) after its massive sell-off that started one month ago. UUP resistance 26.51 – 26.65 (strong). Fib support 25.81 (strong).