This week…

• Most markets put in an outside reversal week to the upside potentially signalling that a sharp rally is about to get underway. The S&P 500 broke out of the 1,380 area suggesting that the next potential objective could be 1,450. The rally, however, could be swift. The catalyst was remarks from ECB President Mario Draghi who defended the Euro and suggested that stimulus was coming. Some Fed officials have also been musing about more stimulus to help the weakening US economy.

• Bonds reversed to the downside as the risk on trade came back to the forefront. However, the odds of a major rise in interest is close to nil although the bonds may be weak over the next several weeks.

• Gold reversed to the upside although thus far it has fallen short of breaking out of its resistance at $1,630/$1,640. The US$ Index reversed to the downside and breakdown under 83 could suggest the break of an ascending wedge triangle (bearish).

• Oil prices reversed to the upside but failed to break into the plus column unlike other commodities, equities and gold and silver. Natural gas paused this past week as the weather turned cooler.

• The TSX gained this past week as well following other North American and European markets to the upside.

D.C.

Chart of the Week – The LIBOR scandal

Stock of the Weekk – 10 gold stocks

D.C.

This week…

• The S&P 500 eked out a small gain this past week despite a sharp down day on Friday due to concern (again) over the Euro crisis. The S&P needs to break above resistance at 1,380 to suggest that higher prices are possible and even new highs above the April high of 1,422.

• US bonds rose this past again because of the Euro crisis. The week saw continued weak economic numbers in the US , China and Europe. The Spanish banking crisis is also sparking some supposed flight to quality. US 10 year Treasury Notes fell to 1.49%.

• The US$ Index managed a small gain this past week but left a possible topping pattern on the charts. Gold lost a small amount and the gold stocks were the weakest amongst the stocks this past week. If the US$ is topping then that should push gold prices higher. China is moving towards a gold interbank market and that could result in increased demand for gold.

• Oil prices jumped over $90 on fears of Iran as talks were breaking down, the Syrian situation was worsening and could spiral into chaos following the bombing of key Assad figures. As well there was a bus bombing in Bulgaria that was supposedly linked to Hezbollah and Iran.

• The TSX managed a small gain on the week.

- Overall the markets are lethargic and it is difficult to discern any real direction.

D.C.

Chart of the Week – All that money but what good is it doing?

No stock of the week.

D.C.

This week…

• The stock market reversed losses earlier in the week and managed to eke out a small gain for the S&P 500.

• The S&P 500 rebounded because JP Morgan met profit expectations. But in the background there are growing scandals with the Peregrine Financial collapse that has come on the heels of the MF Global collapse and the growing LIBOR scandal that could engulf the world’s biggest banks and the central banks of England and the US. The dangers of the LIBOR scandal are outlined. This potential danger of this scandal is most likely being underestimated as many do not understand what it all means. But at the heart of it is the integrity of the banking system.

• US Treasury bonds rallied but thoughts of a further round of stimulus (QE) stopped the rally at week’s end.

• Gold rebounded and closed higher after suffering losses earlier in the week. QE and the growing LIBOR scandal would be good for gold. Some are questioning that if the banks were manipulating LIBOR what else might they be manipulating? Gold is at the top of the list. The US$ faltered in the latter part of the week and failed to follow through on the previous week’s sharp up week.

• Oil and gas prices rose on the week with oil prices closing over $85. A breakout over $90 could set up a run to $100. The hot weather continues to favour natural gas (NG). NG could be on the verge of breaking out over $3.

• The TSX Composite faltered this past week due to weakness in gold, energy and metal stocks. The TSX Venture Exchange (CDNX) continued its moribund ways with another down week. However, the CDNX continues to show signs of accumulation with up ticks in volume and insider buying.

D.C.

Chart of the Week – US monetary base and gold

Stock of the Week – Undervalued silver stock

D.C.

Chart of the Week – Looking at gold from a different perspective.

Stock of the Week – Bottom fishing a major oil play.

D.C.