This week, watch the US Dollar. The repurcussions of a breakout, to the upside, are mind boggling. At any rate, use behavior here as a benchmark for all the markets below.
SPX Weekly Close 1964.58, Up 77.82 (4.12%)
Reviewing last week, I predicted that 1878 support would hold and that longer time-frame buyers would be interested at that level. I also said that I expected 1964 to be tested in the S&P 500 (^GSPC:SNP).
Friday, my comments were, “I expect a retest of yesterday’s highs and at least a 3-handle punch through 1964 before we find out if buyers or sellers will be in control at this level” and “This is an important test for future direction. Blowing through 1964 should give us at least 1978 and closing above there increases the probability of new highs into the end of the month. Failure at 1964 opens up the possibility of a another test down”, with first real support at the middle daily Bollinger Band, at 1928.29 on Friday.
I’m looking for a pretty choppy week and more than token resistance from the bears at current levels. The 1919 level stands out to me, as the place that must be tested and hold this week to provide structure and reassurance for further gains and a healthy outlook for November. After a move like last week’s, I don’t expect much upside this week. I believe the immediate risk is to the downside. In spite of the run up, this marketfeels pretty nervous and somewhat perilous. I wouldn’t take it for granted that it will do what it has done all year and run to new highs this time.
TSX Weekly Close 14543.82, Up 316.14 (2.22%)
Last week, my forecast was for a move up to try to regain 14521 and the middle Bollinger Band. Friday, the middle Bollinger Band was at 14520.47 and the market did close above it. However, unless the TSX rises and closes above 14666, I do not see further upside this week and expect either indecision and consolidation or another strong move down.
It may seem counterintuitive but I believe that another strong move higher here, early in the week, will be very negative for the TSX by Friday.
$GOLD Weekly Close 1231.20, Down 7.30 (0.59%)
Last week, I stressed that resistance at 1255 was very strong and that “I expect one more low before there is a chance of a weekly trend change in $GOLD.” The high for the week was 1255.60. That resistance held and $GOLD closed down 7.30 for the week, at 1231.20. To me, the rejection at 1255 and the close below 1238 on Friday is a negative signal.
As I’ve said before, I expect one more good move down in $GOLD, to at least 1177 before long-term buyers will start to find value.
$USB 30-Year US Treasury Bond Price (EOD) INDX Weekly Close 143.10, Up 0.99 (0.70%)
Over the past few months, I have done analysis on the TLT, Barclays 20+ Year Treasury Bond Fund. I have decided to change that to the actual 30-Year US Treasury Bond Price Index.
Last week, I expected selling in the bonds, to test weekly support at 139.99. The low for the week came in at 141.79. This market is in an uptrend daily, weekly and monthly, has buyers and shows resilience. My experience in the bonds, in the past, is that a trend like this is not likely to end, without an impulsive and seemingly impossible move in the direction of the trend. Never get in the way of a bond trend. The market will tell you when it’s expensive and the selling will be very evident. I have first daily support at 142.86 and a firmer level at 141.64. Weekly support is at 139.99. A break of weekly support at the end of the month would be the first sign of danger.
For now, this market is speaking.
WTIC Weekly Close 81.30, Down 1.62 (1.95%)
Last week, I thought that weakness was not a good sign for this market at this point and this week I repeat that.
Hope is alive in the marketplace that 80 will hold, that the 77.28 low of June 25, 2012 will provide support. I don’t find substance in hope and wouldn’t count on it. My support for this week and this month is 70.68 – 70.83. This weekly downtrend, in conjunction with the monthly downtrend should grab your attention. Rather than listening to the noise, let the chart action speak. Daily, 85.90 must be regained, as a first step; weekly, you have to see 87.89. Those are the numbers that might signify long-term buying.