Weekly Report

IJR and IWM are trading well, and still look like Head and Shoulders breakouts.  The only real concern we have is that TLT is weaker than we would like to see.

With both SPY and QQQ at all-time highs there could be decent follow through in spite of the tariff threats.  Bonds often make an important cycle low in October and given the patterns on the long-term quarterly charts of TNX and TYX, this coming October could be especially difficult.  Overbought readings on TLT (bond prices) going into the July/August timeframe would set up a decline in price into October – one that could be worse than many expect.

We reiterate that slower moves are more bullish – we like the trading.  Are the Shorts on the run? Not really as they are making money. But down the road there could be covering by the shorts.

Industrials is one of the strongest sectors, yet this is not widely acknowledged.  GLD has closed below the key 302 area. We have been looking for a break of this area to signal a drop in gold, so be careful if you are in GLD.

Tuesday was a strong day that gapped up and closed near the high of the day.  TLT had an outside day up that suggests further gains.

Before the US attacks, we had been looking for an up week, and the indicators still suggest this is likely.  We would expect to be down early in the week, and up at the end. We will have more in the Midweek and may issue an alert this week if conditions warrant this.

Our advice is to use this to pick up names you want to own if they are down and near strike prices.  The trend on GLD is still up unless it moves below 302 but watch this carefully.  TLT has rallied and should have more upside, per our forecast.

While we could be choppy in the first part of the week, we expect to resume the rally by the end of this week.  If there is more weakness, numbers that could be tested are SPY 586, and QQQ 514. If we see these ETFs trade down early in the week, we would buy at those points.

We want to show some charts of GLD and SLV, illustrating the dangers of an advance in SLV, and how this often ends bull markets in the Metals.  If SLV rallies into a peak and GLD starts to fall below 302, it could be time to sell.

We have been looking for a short-term pullback before the summer rally begins, but that may not occur.  The McClellan Oscillator indicator suggests further upside as well.  We are starting to see the kind of action in silver that often indicates a peak in the metals.

We do think that the down opens and up closes are positive.  If there is a strong move in SLV it would be an opportunity to sell GLD.

We are expecting another week of choppy, sideways to slightly down trading, and then a solid summer rally.  We continue to see bullish forecasts, and we too are bullish, but this scenario of a potential spike in long-term interest rates could cause some problems in the third quarter.

Our Accumulation Models continue to suggest a rally into the July time period.  Readers will recall that we have been concerned about higher rates for the last six months or so – but that our forecast has been for this risk to show up later in 2025.

We still expect higher prices into July/August.  GLD has rallied back above 302 but really needs a weekly close to maintain the uptrend.

While indicators are overbought short-term, sentiment indicators suggest further upside.

SPY 560 might very well hold this. Advisors that want to add money should consider adding some cash if that area hits.  Watch GLD here. It is holding secondary support at 299.

We have mentioned that if we are going to see a pullback/retest it should start this coming week. If this occurs (and this looks more doubtful) we are looking for a test of the 500-area on SPY.  Our big concern is rates, and we note that TLT is not showing much upside, a concern that we will keep observing.

If this works as we expect, the markets will come down on heavy bearishness, but with better breadth.  TLT is trading well, holding short-term support with an outside day up on Tuesday.  One thing to watch in the news on gold is to see if the exchange changes margin requirements.

The question on everybody’s mind is whether we will have a retest. We are overbought enough to have a pullback starting this week.  Our forecast has been for an especially strong summer rally this year and we are sticking with that, after a dip at least over the next two weeks.  We still think Small Cap is a speculative buy.

We still think a retest is likely but note this almost always within four to six weeks after the first low.  A successful retest means strong stocks won’t go down so we should be buying for models now, not waiting.  TLT continues to rally off the bottom in the 85-area and is now testing some resistance in the 90-area. We continue to look for 92, and then 95.