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Toronto Stock Broker David Chapman
March 12, 2012

Technical Commentary – S&P 500, Gold, Oil All Rebound.

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.


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