Weekly Report

SPY and IJR broke out last week, maintained the breakout and are trading well. So far, the basic structure of equities is conforming to the outlook expressed by our Accumulation Models: IJR and SPY are outperforming QQQ – as we have expected. GLD is now on track to test 412 to 420 and we would trade for those areas. We would expect more downside for oil over the next few weeks.

SPY has closed comfortably above our breakout number of 752, and IJR has closed above 147. Our plan to buy SPY and IJR on a QQQ buy recycle was effective, so watch when QQQ stochastic becomes overbought. GLD needs to clear 388 to confirm a rally to the 412 to 420-area.

We believe a buying opportunity in bonds is close by. TYX is trying to break out of long term consolidation.

SPY and IJR continue to trade well and look like support should hold. On SMH, a 50% retracement would put the index at roughly 460. So, let’s look for support in that area. Best is around 490,

Our plan has been to wait for an oversold condition to occur in the weakest index (QQQ), and then buy SPY and IJR, or even stronger sectors than Tech.

We still expect a rally in stocks, and more decline in Interest rates. Although rates are rising a bit, REITs are still up.

QQQ is on support in the 700 to 690-area, and a little more time should get us oversold. Below 70 would suggest the rally in Brent is over.

GLD has moved below and then back above 370 – our benchmark number. This means it is a tad weaker than we have been expecting. Resistance here is 378, then 385. If above these prices then GLD can hit our targets of 412. If we wanted to own stocks and not the miners ETF, we would use NEM and AU.

Ideally, QQQ will hold 700 while this choppiness plays out. Now XBI and IBB have come out of the second consolidation and look to put on another big move.

For the record, a double top would be confirmed by a move below 735, and that would suggest consolidation unless 722 breaks as well. As long as GLD can hold 370, the chances of a test of 350 have gone down. A move above 390 would set up a test of 400 to 412, where traders should sell if it can get there.