Update Only.

• The portfolio closes a couple of picks.

• Little has changed in the last couple of weeks.

• The markets may be rolling
  over at a critical resistance zone.

D.C.

Chart of the Week – Inflation Adjusted Dow Jones Industrials – not a pretty picture.

This week

• Markets rally. S&P breaks out but key 1120 still be hurdled.

• Bonds make a new high and reverse. Bond rally over?

• Gold is even but silver rises and the precious metals stocks were up. Favourable seasonals but gold needs to break $1220 and $1250.

• Oil prices also broke out but $82.50 remains important. Possible targets to $95.

This week

• Stocks fall in the face of signs that the economy is once again sliding.

• Bonds rose and the authorities will increasingly be caught between a rock and hard place as stimulus programs are having limited impact and the call for austerity programs grow. But if the economy is sliding once again as appears to be the case austerity programs will be the worst thing possible and increased stimulus programs will also be the worst thing possible as the debt continues to grow.

• The US$ fell sharply. The US suffered a debt downgrade at the hands of the Chinese. But North America ignored it.

• Gold was weak as deflation is now being perceived as the problem. But historically gold is a store of value in both deflation and inflation.

• Oil prices weakened on thoughts that a faltering economy will lower demand. The BP oil well has been capped but more serious dangers lurk below. “”””” See the special report on the dangers “”””””.
  We managed to slip in a few charts.

D.C.

Stock Picks – update only.

• Markets were up small on the week.

• Evidence continues to gather that a major top for the markets may be in.

• Over the past couple of weeks the indices plunged to new lows.

• Losses were seen across the board and few were spared.

D.C.

This Week’s Chart: Wither Oil Prices?

• Oil prices hit their all time high at about $147 in July 2008 just before the financial
  panic of 2008.

• To date at its best oil prices only recovered about 50 per cent of the 2008
  collapse.

• For the past 8 to 9 months oil prices have traded roughly between $65 to $68 on the low
  side and highs of $85 to $87.

• There are two arguments going forward…

This week

• The stock market had its best gains since October 2009 based on the perception that the economy is turning the corner. Lurking in the background though are signs that the economy is not as robust as they would like to believe.

• With stocks up bonds fell and an auction this coming week in the US is not expected to be received well.

• Gold also was up (as were other commodities). The commercial COT for gold is at its best level seen in a few months. This is bullish going forward as the compelling bullish patterns solidify themselves.

• Oil prices also rose but here the outlook remains uncertain as the trading range seen over the past several months just continues.

D.C.

Update Only. The markets have been weak but the portfolios are outperforming.

• Evidence continues to gather that a major top for the markets may be in.

• Over the past couple of weeks the indices plunged to new lows.

• Losses were seen across the board and few were spared.

D.C.

Chart of The Week for July the 8th.

• Gold is forming an interesting bullish pattern and once this consolidation is over higher prices should be seen.

D.C.

This week

• Stocks were hit hard this past and few sectors survived the carnage. However, some indicators are oversold sufficiently that at least a short term rebound could get underway. But any failure to break above S&P 500 1120 would ensure that any rebound is just an excuse to sell. A break below 980 would be quite negative.

• Gold fell sharply this past week but it appears to be just temporary factors with a hedge fund going out of business and an unwinding of gold/euro and gold/sterling trades as the Euro debt situation abates.

• Energy prices fell and the energy stocks are threatening to go lower. Energy demand is falling and the stocks are rising a deadly combination for oil prices especially.

Our expectations this week are that a full report should be out next weekend.

D.C.