THE CHAPMAN REPORT – Chart of The Week / Stock of The Week

Chart of the Week – Oil
Stock of the Week – An oil stock naturally (well a services company).

Update..

Since there will be no technical commentary this weekend as we are away here is a brief update.

The S&P 500 has reached the next targets at 1320. A close over that level this week would suggest that the next level over 1400 could be seen into March. The key breakdown zone remains at 1180 on the weekly charts. On the daily charts a break under 1275 would suggest a test of the 1180 zone is possible. There are no signs of a top forming and despite the steady rise there is not as yet any frothiness that might suggest a top.

Bonds have bounced back a bit this week but that shouldn’t be surprising given the sharp drop the previous week. Bonds still look dangerous and could prove to be a serious danger to the stock market. But not yet. There is evidence that the Chinese are not only laying off on new purchases but are selling slowly some of their current holdings.

Gold has held above $1350 but the recent advance has been somewhat laboured. The market still needs to take out $1380 and close over there to suggest that the highs would be taken out. Until then a test of the recent lows near $1310 could be seen. A drop to $1270/$1280 is also possible. That would be a solid test for a market that is still rising. The US$ remains weak. The weak US$ combined with a lethargic gold market has the conspiracy theorists in a flutter that gold once again is being suppressed. Certainly the selling is coming in the paper market and not in the physical market. However, gold is trying to find a cycle low and once that low has been made the market should resume its upward course. The pattern forming is somewhat similar to a pattern that formed in February 2010 and even back in 2008 but of lower intensity and drop in prices.

D.C.