THE CHAPMAN REPORT – Technical Commentary 12/20

Because of the seasonal holidays this report will not be produced over the next two weekends. We will return the weekend of January 8. A forecast for 2011 will be prepared.

Have a safe and happy holiday and a prosperous New Year.

This week

• The S&P 500 once again makes new highs. The head and shoulders bottom target was at 1246 and the high this week was 1246. IS the top in? Will Santa Claus come to town? The first 5 days of January have a 90% accuracy rate for the entire year.

• Bonds fell again but the decline this past week was muted. A bounce could occur but continued economic growth, the impact of the tax cuts and QE all say bond prices are going lower.

• Gold fell but silver, platinum, palladium and copper all rose. Some cycles are suggesting that this was a period for an interim low. Once that low is in new highs are probable. The corrective pattern unfolding is bullish corrective flat.

• Oil prices are waffling under $90; natural gas fell sharply putting the fresh buy signal immediately into doubt. Stocks were mixed. Targets for oil still remain up to $100 but to the downside $82 must hold.

• The TSX Composite lost a little as metals and financials were weak. Financials continue to look shaky.

D.C.