THE CHAPMAN REPORT – March 1 Technical Analysis

This week

• Stocks fell sharply on Tuesday following release of weak economic numbers but then spent the rest of the week with a feeble recovery. Key is break back above 1,120 to keep alive the potential for a positive March and a run to 1,200 or higher.

• Weak economic numbers and Greece’s problems pushed bond yields sharply lower as the record $126 billion of 2, 5 and 7 year notes went well. But bonds ran into key resistance zones again so follow through is important this week or a failure is possible.

• Gold (and gold stocks) staged a sharp outside day reversal on Thursday. This was encouraging as they may have finished a test of the recent lows (that held). Key is regaining above $1,150 and for the HUI above 420. Stocks continue very undervalued in relation to gold.

• The US$ continues to falter but has not as yet broken down. If focus shifts from the Euro problems to the problems of the US states (and municipalities) the perception of the US$ as a safe haven of late will evaporate quickly.

• Oil prices rose but faltered later in the week on the weak economic numbers. Natural gas prices were weak all week.