Stock of the Week – A major energy stock may be poised to break out.

D.C.

• A shortened Technical Commentary is attached.

• The S&P 500 closed over 1,500 for the first time since October 2007. Potential objectives remain up to 1,600. The rise has become increasingly steep raising the risk in the market. There are numerous negative divergences across all time frames. In years ending in three tops and bottoms tend to occur in either January or February.

• Bonds fell this week (however, the Cdn bonds were flat). Bonds fell because of increased confidence in Europe.

• Gold had a difficult week falling for three consecutive days once again on odd trading activity. The gold stocks had an even more difficult week as they panicked with gold’s fall. Gold falling this past week against the backdrop of strong fundamentals appears counter intuitive. The US$ also fell this week as the Euro was up even as the Japanese Yen continued its recent decline. Gold in Yen hit new all-time highs even as it weakened in US$ terms.

• Oil prices continued their recent rise. Oil stocks enjoyed another good up week. Oil continues to be buoyed by improved economics in Europe and renewed economic activity in China.

• The TSX Composite was up again with 7 sub-indices making new highs.

D.C.

• The S&P 500 reached new highs this past week as Congress and the White House appeared to attempt to forge a compromise over the debt ceiling. Some decent earnings reports didn’t hurt.

• US Treasury bonds and the Cdn Government bonds both eked out small gains this past week as congress and the White House acted somewhat conciliatory over the debt ceiling.

• Gold and silver both enjoyed a good up week. The Bundesbank announced that they would repatriate its gold held in the New York Fed and at the Bank of France. This is seen as bullish for gold. The US Mint suspended silver American Eagle sales temporarily as demand has been high. Gold was up despite a rise in the US$ this past week. The Japanese Yen was down sharply this past week as Japan continues efforts to devalue the Yen. Gold expressed in Yen made new all-time highs.

• Oil prices were higher sparked by improved economic numbers in China and the US and the attack on the Algerian gas plant. Oil prices closed over $95 for the first time since September 2012. $95 was a key resistance point and a close over that level could suggest a rise to $99/$100.

• The TSX Composite was up again continuing its recent gains. The CDNX faltered but continues to show that a possible low is in.

D.C.

Stock of the Week – High flying crackberry

D.C.

• Despite the looming debt ceiling debate the stock markets eked out another gain and are now very close to taking out the September 2012 highs. An outline of what happens in years ending 3 is provided. Whatever happens the high or low for the year has usually taken place in either January or February over the past 120 years. There was one exception the Iraq war year of 2003 where the low for the year was seen in March.

• Bonds marked time this past week.

• Gold was up but fell on Friday despite a decline below 80 by the US$ Index. It appears that the hedge fund liquidation may not be quite over. With the US$ Index falling and a potential breakdown under 79 gold could rise sharply here.

• Oil prices were also up on the week but remain below $95 resistance. While tensions continue in the Mid-East there is no sign of any potential blow-up that could send oil prices soaring.

• The TSX Composite rose again this past week. If the commodity sectors of Energy, Metals, Gold and Materials start rising to any degree the TSX Composite could soon make new highs for the current move. The TSX Venture Exchange continues to show signs of a bottom.

D.C.