This week…

• The stock market faltered as the Fed indicated it may not be willing to provide more QE. But Friday’s job numbers caused the briefly open S&P 500 futures market to fall on Friday following release of the numbers.

• The bond market reacted positively to the lower than expected jobs numbers on Friday and rallied after being marginally weak earlier in the week. In Canada it was the opposite as the jobs numbers surprised and the bond market weakened as result on thoughts the BofC might hike interest rates sooner than later. With the Fed holding short rates at current levels until 2014 the odds of the BofC hiking rates any time soon are low to nil.

• Gold fell this past week as the FOMC minutes released on Tuesday indicated that further QE was off the table. The US$ rallied. But with the release of the lower than expected jobs numbers on Friday gold rallied in the cash market and the US$ faltered. A possible bottom head and shoulders pattern on gold is still in play as is a possible top head and shoulders pattern on the US$. The gold stocks were “awful” as they plunged to new lows for both the HUI and the TGD. Sentiment is at rock bottom and there are a number of positive divergences in both weekly and daily indicators. The HUI and the TGD have also fallen into a congestion zone from 2010 and they are trading at levels last seen when gold was trading at $1,200.

• Oil prices rebounded after faltering earlier in the week but natural gas prices fell to new lows. The NG market is quite depressing but oversupply should continue into the future.

• The TSX Index was down on the week but it was led lower by weakness in golds, energy, materials and metals.

D.C.

Chart of the Week – Stifel Nicolaus cycles.

Note: Stock of the Week will return next week.

D.C.

This week…

• The S&P 500 finishes its best first quarter since 1998 gaining almost 12%. The S&P 500 and the NASDAQ have made new highs above their 2007 highs. But the Dow Jones Industrials has yet to see new highs. A divergence? Key level is now at 1,370 as a possible rising wedge triangle appears to be forming. Cycles are mixed with some going straight up from here until fall with others topping in April. Potential objectives remain up to 1,550 and even 1,600.

• Bonds steadied this past week in the US but investors are switching to shorter maturities along the yield curve. Weaker economic numbers in Canada along with austerity budgets pushed Cdn bond prices higher this past week.

• Special section on the “Demise of the Penny” and what does it mean. In the Cdn bond section.

• Gold rose as the US$ faltered. The BRICs could be forming an alternative system for trade using their own local currencies. India, China and others continue to trade for oil with Iran using gold, local currencies and barter. But all of these events are another knock against the US$ as it faltered this past week. The gold stocks made new lows again but managed to crawl back to unchanged. They are showing signs of a bottom.

• Oil prices faltered as the western world announced they would release strategic reserves. But oil prices bounced back at week’s end. Is there any hope for natural gas prices as they plunged to new lows again.

• The TSX was down on the week as energy, metals and gold faltered.

Note: Next week is a long weekend and I am away part of the weekend. However, a short commentary will be produced.

D.C.

Chart of the Week – Long term trend of gold remains intact

Stock of the Week – Volatile is the best way to describe this stock but it could bring rewards

D.C.

This week…

• Weak housing numbers and weak purchasing managers reports (manufacturing) out of Europe and China helped push the stock markets lower this past week. Markets however, rebounded on Friday. New highs were seen once again for the NASDAQ and the S&P 500 but only the NASDAQ closed higher on the week. Despite the pullback there is no sign of any significant top in the stock markets. The topping process for the stock market could take a number of months to unfold. Spike tops are rare.

• Bonds fell sharply the previous week as they broke what appears as a top. The markets bounced back this week on the weak housing numbers and the PMI’s out of China and Europe. Despite this rise in interest rates the monetary authorities are not about to embark on any tightening program and any rise even in long term rates is expected to be shallow.

• Gold prices reversed and closed higher this past as the US$ weakened towards week’s end. Gold still appears to be forming what may be a head and shoulders bottom pattern and the US$ a head and shoulders topping pattern. Weak seasonals into March are often followed by stronger seasonals into April and May for gold and silver. The gold stock made new lows for its ups and downs over the past 15 months but the TSX Gold Index reversed and closed the week higher a positive development. The commercial COTs for gold and silver continue to improve and the currencies commercial COTs remain bullish.

• Oil prices firmed this past week on lower supplies reported by the EIA and news that Iranian exports fell (should not have been a surprise). Natural gas continues to be plagued with oversupply. Oil prices appear to be consolidating well over $100 but need to break above $110 to confirm a move to the next level.

• The TSX was down on the week as gold, metals, materials and energy were weak. However, the TSX also appears to be consolidating recent gains above key MA’s.

D.C.

Chart of the Week – How low can the junior exploration stocks go?

Stock of the Week – A rally with no end?

D.C.

Chart of the Week – Retail Sales

Stock of the Week – Searching for yield

D.C.

This week…

• After falling sharply earlier this past week the S&P 500 rebounded to post a small gain on the week. Resolution of the Greek debt situation (or at least another temporary resolution) plus the strong job numbers seen on Friday helped push the market to the small gain. This could be a key week that could help determine whether the market has more legs to go into April or May or whether a significant top could be seen. There remains potential objectives up to the 2007 highs a level already achieved by the NASDAQ and the Dow Jones Transportations.

• With the Greek debt issue seemingly laid to rest (until the next crisis) the flight safety of US Treasury bonds abated and the bond market fell in price (yields rose). The bonds continue to trace out what could be a top and are perilously close to at least a small breakdown.

• Gold also rebounded this past week after falling earlier in the week. Gold and the US Dollar continue to trace out what could a top in the US$ and a bottom in gold. However, that scenario cannot be quite taken to the bank just yet. As noted gold did rebound but needs to regain at least $1,750 to suggest that the recent $1,790 highs could be taken out. The US$ continues to trade under 81 but above that level new highs above 82 for the US$ Index could be seen.

• Oil prices also rebounded this past week especially buoyed by the US jobs numbers on Friday. Iran appears to have faded slightly into the background but is not out of the picture. Iran continues to find ways around US sanctions and others are assisting them. India will pay for oil in rupees and gold as an example. Other banking arrangements would have to made as well as Iran has been booted out of the international payment system known as SWIFT. Natural gas made new lows but that market continues to trace out what may finally be a bottom.

• The TSX Composite fell this past week as its fortunes continued to be tied to the energy, gold, materials and metals sub indices. All were down this past week even as most of the other sub indices were up on the week.

NOTE: I am away next weekend so there will be no report. I will attempt to get an short email report out for Tuesday morning. The next full report is scheduled for March 26.

D.C.

Chart of the Week – Patterns forming on the US Dollar and Gold

Stock of the Week – Is the Canadian housing market due for a correction?

D.C.

This week…

• The S&P 500 moved to new highs this past week above the May 2011 highs. The NASDAQ has not only taken out its 2011 highs but has also taken out the 2007 highs. The stock markets failed to react negatively to the suggestion from Bernanke that QE was off the table for the time being. Behind the scenes QE appears to be alive and well. March is an important time frame for a potential top this year. Greece and Iran are the potential catalysts. But if the market survives March cycles suggest that the next time frame for a top is not until late April/early May. There remain potential objectives that could still see the market run to the 2007 highs. The key for market participants is to watch carefully the support zones noted in the commentary for clues as to whether a top is in.

• Bonds barely budged again but fears of Greece sparked a short covering rally late this past week. A stronger US$ also helped the bond market. The bond market continues to trace out what appears to be potential topping pattern.

• Gold (and silver) was smashed this past week as the market reacted negatively to Bernanke’s comments (or more to the point lack of comments) as to whether QE would continue. The reaction saw a $100 down day for gold. The Bernanke testimony coincided with someone dumping 31 tonnes of gold on the market. Some have suggested that the fix once again is in. There was, however, little follow through however, the zone from $1,650 to $1,690 must hold if the market is to once again recoup. Many gold analysts see the smash as another attempt to suppress the gold market and that it will fail as other attempts in the past have.

• Oil prices did not see new highs this past week as statements from President Obama lessened the thought that Iran would be hit any time soon. The energy stocks pulled back as well.

• The TSX was down on the week but it was dragged down by Golds, Energy and Metals. Most of the other sub indices were up on the week.

D.C.