Chart of the Week – Consumer Confidence is flagging

Stock of the Week – Another disaster in the making?

Reminder – we are away this weekend so there will be no Technical Commentary.

D.C.

This week…

• The S&P 500 was battered back and forth on whether a solution would be found to the Greek debt crisis. A solution, even temporary would trigger a relief rally. July is notably a better month, the best of the 3rd quarter. June has lived up to its billing given the S&P 500 is down about 6%. Breaking out over 1310 is key for the S&P 500. Under 1250 though and a decline to 1200 is probable.

• Bonds diverged as the long end of the curve saw price declines even as the short end of the curve continued the recent rally. After 11 consecutive weeks up this has been one of the longest bond rallies since the 1980’s. Bonds continue to be driven by a flight to safety – the Greek crisis and the Middle East/North Africa crisis. The US debt limit also lurks in the background and there are no signs of a compromise on that front. PIMCO has warned – failure to find a debt solution could trigger a panic and debt downgrades.

• Gold and silver fell as there appeared to be a solution to the Greek debt crisis thus lowering the demand for gold/silver as a safe haven. But once again it was paper gold that fell as physical demand remains strong. The precious metals stocks rose a divergence with the metals. The US$ rallied as a safe haven to the crisis in Europe seeming to ignore the looming crisis with the US debt.

• Oil prices fell sharply as the IEA announced the release of 60 million barrels of reserve oil. This as most analysts agree is merely a very temporary short lived solution. Still it caused oil prices to fall to their lowest levels since the onset of the Middle East/North Africa crisis in mid February.

• The TSX rose as almost everything was up except energy.

Next week is the long July weekend and we are away. As a result there will be no report, although an attempt will be made to put out a short version which may not appear until July 5. A full version will return the following week. We are on holidays the last two weeks of July and there will be no reports during that period although a short email update is possible.

D.C.

Chart of the Week – Gold/Copper ratio

Stock of the Week – an interesting gold/copper play in Canada

D.C.

This week…

• The story of the week was volatility and the Greek debt crisis. The crisis over whether Greece may or may not default or whether the EU and the IMF will bail them out dominated the headlines. That and the ongoing riots in Greece as they protested the austerity measures. As well China hiked interest rates and reserve requirements again heightening concern that the global economy will slow. The result was the market saw some wild swings. The S&P 500 eked out a tiny gain this past week. The NASDAQ however was down on the week while the Dow Jones Industrials also eked out a tiny gain.

• Bonds were up again against the backdrop of the turmoil in Europe. Looming in the background is the potential for a US debt default if they do not resolve the debt ceiling. The odds of a default though are very low.

• Gold rose despite a rise in the US$. Silver, however, fell while the precious metals (PM) stocks took it on the chin again falling to new lows. The PM stocks are almost as cheap as they were at the lows in 2008 vs. gold.

• Oil prices fell sharply on concerns of a slowing of global growth. That and the promise of the Saudi’s to increase oil production helped push oil prices to their lowest level since February. Natural gas also fell as supplies increased.

• The commodity laden TSX fell as Energy, Metals and Golds all fell pulling the index down.

D.C.

Chart of the Week – Dow Jones Industrials/Bonds ratio

Stock of the Week – Possibly not all China based stocks are having the same problems as Sino Forest.

D.C.

This week…

• The stock market fell on the week as fears over a slowing global economy took hold. The S&P 500 broke a key support zone and that suggests that objectives down to 1250, 1200 and lower are now possible.

• Bond prices rose (yields fell) for the 9th consecutive week. Fears of a slowing global economy coupled with safety spurred a further bond rally. Fitch has warned that the US must resolve its debt ceiling problem or they could face downgrades.

• Gold prices hesitated and silver prices eked out a small gain. While the current correction may have a little longer to go gold prices have held in very well. Silver prices have steadied after the initial fall. The US$ rallied on European debt woes. But the reality is that the Euro and the US$ are taking turns declining. Ultimately that is very positive for gold.

• Oil prices faltered as Saudi Arabia announced they would increase production to make up for the loss of the Libyan oil. But the Saudis capacity is limited and it is heavy oil not the light sweet crude of Libya. There is a shortage of refineries to deal with the Saudi heavy oil.

• The TSX fell as oil prices faltered and other commodities faltered as well on fears of a global slowing economy. There wasn’t one sub index to the plus side this past week.

D.C.

Chart of the Week – Oil. Is it the same in US$ and Euros?

Stock of the Week – A conservative energy play.

D.C.

This week…

• S&P falls for 5th week in a row. Economy weakening. Lower prices appear to be ahead.

• Bonds rise as the economy weakens. Jobs data disappoints.

• Gold rises but it was pretty laboured. Silver fell as did the gold stocks. Gold is in a correction period and not even a considerably weaker US$ could pull gold much higher. Six degrees of separation? – a special story even if it is a rumour on Dominique Straus-Khan.

• Oil prices are laboured as well but natural gas leaps up.

A full report next weekend.

D.C.