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fib_1618

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With the market continuing to show a good amount of buoyancy here of late, let's again maintain an expectation of further short and shallow price pullbacks to continue in what continues to be a high level price consolidation, and once we get November OPEX out of the way, this may be enough of a weight lifted to resume the advance going into the Thanksgiving holiday period that takes place the following week.

It was another solid week for the equity markets as the weight of this month's option expirations faded and this lifted many of the price indices up and out of their consolidations on Friday for a week over week average gain of .78%, with the broader based New York Composite Index leading the way with a gain of 1.33%, while the S&P Small Cap index of 600 stocks showed a small loss of .29%.

Looking over this weeks money flow charts and we see that NYSE Composite and NYSE Common Only advance/decline lines both showed good cumulative gains with the NYSE Composite settling just 424 net advancing issues from moving back into new all time high territory, while the NYSE Common Only settled just below its declining tops line going back to its summer high point. Also showing improvement was the NYSE Specialty CEF advance/decline line which showed its longest winning streak of positive daily plurality numbers (4) since the mid October lows. With the NYSE Composite up/down volume line (NYUD) now back into new all time high territory as of Friday's close (see cumulative charts), our near term expectation for next week is to see the NYAD line follow the lead of the NYUD in also making new all time highs, and with it, lifting both the commons and specialty issues to higher highs of their own in this same effort.

While the NYSE Preferred advance/decline line closed at new highs for the 7th consecutive week, the NYSE Bond CEF advance/decline line spent its second week in a row moving net sideways which included a break of its longer term rising trendline going back to December of last year. Given the longevity in which money has been moving into this basket of issues, we can allow for such breaks of trend as being necessary pauses (as we saw just recently in the September period), and until we see a series of declining tops, the technical expectation is that interest rates on the 10 year note will remain in and around current levels with a continued downward bias.

Over in Europe, the DAX and FTSE advance/decline lines continued to build on their recent strength with both now moving above their declining tops lines that have been controlling their patterns since last summer's highs. With this break in trend, we also see that prices on both of these exchanges also broke above their resistance lines as well with the monetary announcement of stepped up "Quantitative Easing" by the ECB this past week, no less, the Bank of England's continued accomodative policy of its own. So as long as this one-two punch of easy monetary policy is maintained by the two leading economic powers in Europe, we should continue to see both of these indices remain buoyant for some time to come.

Over in the precious metals, both the Precious Metals and XAU advance/decline lines continued their climbs after breaking above their intermediate term declining tops lines last week, and they are now showing good breadth to price leadership to the upside. Because of this, we can now ease off a bit on our short term outlook for a test of the $1100 area for gold, but until the mid October zone in the A/D data has been taken out, this downside price objective can not be all out cancelled at this time. However, if this same zone in October is taken out during this current sequence, this would go a long way in meeting the timing outlook that was given back at the end of August of a possible tradable bottom in the November/December period...and registering just below gold's .618 retracement level at $1158 an ounce. Stay tuned.

So with November OPEX now behind us, and with the New York Composite Index leading the market to the upside this past week, it would seem that our "pause to refresh" might be behind us now and that a resumption of the advance from mid October is underway. Given the holiday week ahead, many traders will be taking an extended weekend which can open up the possibility of some wide swings during the day throughout the week, with Wednesday providing the potential for extra stimulus with a whole laundry list of economic data being released here in the United States. But when Friday finally rolls around, the expectation is for another positive week overall as the market prepares for what should be bullish December.

Wishing everyone a great Thanksgiving holiday with your family and friends!

Have a great trading week!

US Equity Markets:

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US Interest Rates:

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US Real Estate:

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Precious Metals:

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Australia:

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England:

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Germany:

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