As the world-wide coronavirus pandemic reached epic proportions, stocks collapsed limit-down to start the week, with SPY touching the theoretical level 217.36 (based on the futures), then spent the next 3 days rallying close to the Fib 38% retracement of the entire decline to 263.96. Actual retracement high 263.35. Also, based on the futures. With the Fed stepping in for unlimited bond purchasing (QE to infiniti) and emergency facilities to bolster credit markets, along with programs to lend to cash-strapped American businesses, in combination with the $2.2 trillion fiscal life-line passed by Congress, the firepower is there to hold the stock damage to SPY 210 – 212, in the intermediate term. The stock market 3 1/2 year bull run is over, but came off 20 months of SPY support in the 210 – 212 range, covering years 2014, 2015 and 2016. However, until there is more visability on the true damage to our economy, all bets on the long term are impossible to predict. Near-term SPY support 232.07. Long term SPY support 210 – 212. SPY resistance 273.45.
As fear gripped the financial markets, gold fulfilled its true role as the ultimate safe-haven, an asset with no corresponding liability (despite the on-going fraudulent paper markets) by rallying $128 on the week (1625.50). The gold shares rallied 17%, and resumed leadership vs the metal. A short-term low is due April 3, with a more important low April 8. The bull run should start with 1800 – 1850 as the next intermediate term target. Fib resistance levels: GLD 157.81, GDX 28.00, GDXJ 37.67, SLV 15.35, GOAU 15.65, XAU res 93.75. Long term targets: GDX 45.50, GLD 182.38, XAU 164.74.
The greenback collapsed under the weight of Fed stimulus — falling 4.6% — over 5 straight down days, with UUP closing 26.72. A weekly close under 26.61 turns trends bearish. Look for 26.35 for Fib support in the short term.