• Stock market rally continues but it is getting tired. DJI is the last major index to regain break even for the year.
• Bonds rebound off of major support zone as treasury auctions were better than expected. Grant you it came at the expense of falling demand for corporate bond issues.
• “Green shoots” abound? Hardly. And if they are they are pretty stunted.
• TARP money  repaid. Looks good but then the banks were bailed out through the back door (GM).
• Gold falters even as the US$ was down on the week. Short term correction continues and we could yes see a test below $900 before this is finished. But once this is done we should begin the most spectacular rise as a break through $1000 will set off a major move.
• Oil prices approaching targets of $75 to maybe $85. Look to switch to gassy stocks as natural gas appears poised for a breakout.

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Both the HUI and the TSX Gold Index enjoyed a strong up week with the HUI gaining almost 14% and closing at new highs for the move up. This is bullish going forward. On the other hand while the TSX Gold Index gained 8.6% closing at 300 it is well off its highs at 353. Could the HUI be leading the way? Appears that way but follow through this week is important. The HUI is through resistance and next resistance appears to be at 360. Above 360 we could move swiftly … [read more...]

• GM bankrupt. Old news the market so the market rallied.
• The rally continues but we may run into some short term corrective action.
• Bonds continued to plunge. Too much supply and improving economic numbers have spooked them.
• Gold fell into a support zone. We view this pullback as temporary. Gold remains in a short, intermediate and long term uptrend.
• US$ rose but this was not unexpected. The Cdn$ pulled back but also it was not unexpected.
• Oil running into some resistance. Natural Gas pulled back. But targets for oil remain higher and NG is in the early stages of a recovery.

S&P 500 STRATEGY: BUY(for definitions of terms, see end of report)

GM Is (finally) officially bankrupt. Since this is something that had been widely expected for years the news had no impact on the markets .GM was relegated to the OTC Pink Sheets GMGMQ joining Lehman Brothers (LEHMQ) and other former fallen giants in the trash heap.
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NASDAQ

The NASDAQ’s performance has been superior to the S&P 500 as we have broken further above the 40 week and 200 day MA’s.
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U.S. GOVERNMENT BONDS

The Bond market is now getting dangerous as once again treasury bond futures prices plunged this time breaking a long term up trend line that had been in place since 2007.
This suggests to us that we could now be targeting next major support near 107^20. That would be a fall in price of roughly $30 from the all-time highs seen in December 2008.
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CANADIAN GOVERNMENT BONDS

Canadian bonds followed US bonds south this past week although the drop was not as steep as the US.
Canada bailed out GM as well and GM is now known as Government Motors. Some jobs are saved. The taxpayer got stuffed.
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GOLD, SILVER, PM INDICES, US$ & CDN$

A pull back was to be expected (and is healthy as well).
Gold fell back to $950/$960 support. Silver is well above good support down to $14.50.
Gold could test down to $925/$930 which was a former resistance point.
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OIL & GAS

Oil prices spiked to $70 but pulled back slightly at week’s end to close at $68.
Natural Gas prices closed higher on the week as well but they spiked then pulled back giving it a slightly negative tone. Still we are encouraged and expect this to be temporary.
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AMEX OIL & GAS INDEX (XOI) and TSX ENERGY INDEX

The recent rise in the oil indices continued as the TSX Energy Index rose 1.4% although the XOI fell very slightly by .66%. It was a sort of negative week as the TSX Energy Index closed below its opening levels.
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TSX INDICES

TSX Composite up 1.9% on the week.
3 sub indices down – Gold, Materials and Consumer Staples – 11 sub indices up.
Some indices continue to make new highs for this move (not in the past year) – TSX, TSX 60, CDNX Venture, Energy, Metals & Mining.
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