Axiom

Economic Commentary.

[Axiom @AxiomGold]

Last week the U.S dollar posted a breakout above the declining trend resistance line

[Axiom @AxiomGold]

With the Fed back on track to raise shortterm rates the stock market, liking security, stability and knowledge of what is to occur, rallied.

[Axiom @AxiomGold]

In their statement, the Fed recognized that job gains had slowed, but that economic growth, though moderate, continued.

[Axiom @AxiomGold]

On Wednesday the Federal Reserve left its benchmark short-term interest rate near zero but signaled that a rate hike is still on the table

[Axiom @AxiomGold]

For the week, gold stock prices lost almost nine percent.

[Axiom @AxiomGold]

For three weeks gold stocks attempted to breakout above their 2008 bear market lows but have failed. The short term advance has reversed.

[Axiom @AxiomGold]

without small caps being at least part of the bullish picture, there is a small black cloud over the rally's fireworks.

[Axiom @AxiomGold]

Wednesday's fed inspired rally pushed small caps up to the RUT 1180 resistance level, but they promptly fell back into their trading range.

[Axiom @AxiomGold]

Small caps remain within their sideways trading pattern, with RUT 1180 as resistance and RUT 1140 as support.

[Axiom @AxiomGold]

Gold stocks rallied, broke above their 50-day moving average line, and closed slightly above their old 2008 bear market lows.

[Axiom @AxiomGold]

RUT closed slightly above its declining 50-day moving average line this week.

[Axiom @AxiomGold]

The current rally in small caps has not yet broken above the prior September rally highs.

[Axiom @AxiomGold]

big caps and especially technology stocks are rallying, small caps remains below resistance at RUT 1180,

[Axiom @AxiomGold]

The initial selloff in August was so fierce that reaching a final bottom in only five days of selling seems unlikely.

[Axiom @AxiomGold]

SPX remains in a downtrend in this chart and I am looking for another leg down.

[Axiom @AxiomGold]

The SPX rose this week but remains well below its old rising trend support line and will be expected to act as strong resistance .

[Axiom @AxiomGold]

Downtrends end only when extremes of fear are reached. That has not yet happened.

[Axiom @AxiomGold]

Small caps have strong resistance at the 1160-1180 level. They closed at RUT 1165.36 this week.

[Axiom @AxiomGold]

Small caps are not showing the strength needed to break out of the downtrend. As of now small caps are the weakest of the major U.S. indexes

[Axiom @AxiomGold]

There are probably months of declines ahead.