Editor Note: Highly recommend that you take a monday morning visit to Don Vailoux’s monday report where he analyses an astonishing 40 plus Stocks, Commodities and Indexes.

6 charts and commentary below:

The Bottom Line

Swing trading strategies remain the same. Purchases of equities and equity ETFs are not compelling at current levels. Intermediate upside is limited and downside risk is significant. Most equities and indices are trading substantially above their 50 and 200 day moving averages. A return to these moving averages implies significant losses from current levels. Downside risk is expected to be tempered somewhat by continuing weakness in the U.S. Dollar. Look for a shallow correction between now and late October followed by a significant upside move into next spring.

The Dow Jones Industrial Average gained 164.14 points (1.74%) last week. Intermediate trend remains up. The Average has formed a rising wedge pattern. It remains well above its 50 and 200 day moving averages. MACD is trending lower from a short term overbought level. RSI and Stochastics are short term overbought, but continue to trend higher. Strength relative to the S&P 500 Index remains neutral. Volume continues to trend lower.

The Dow Jones Transportation Average added 211.66 points (5.62%) last week. Intermediate trend remains up. A rising wedge pattern has formed. The Average remains well above its 50 and 200 day moving averages. MACD is trending lower from a short term overbought level. RSI at 71.65% and Stochastics are short term overbought, but continue to trend higher. Strength relative to the S&P 500 Index remains positive. Volume continues to trend lower.

The TSX Composite Index increased 235.76 points (2.14%) last week. Intermediate trend remains up. A rising wedge pattern has formed. The Index remains well above its 50 and 200 day moving averages. MACD continues to trend lower from a short term overbought level. RSI and Stochastics are short term overbought, but continue to trend lower. Strength relative to the S&P 500 Index remains negative.

The Canadian Dollar gained 0.83 last week. Intermediate trend remains up. Resistance is at 93.95 and in a band above 96.69. MACD is trending lower from a short term overbought level. RSI is neutral. Stochastics are short term overbought, but continue to trend higher.

The U.S. Dollar dropped 1.48, broke support at 77.43 and resumed an intermediate downtrend last week. Next support is at 75.89. MACD continues to trend lower. RSI and Stochastics are short term oversold, but continue to trend lower.

Gold added another $11.80 U.S. per ounce last week. It broke resistance at $1007.70. Next resistance is at its all time high at $1,033.90 U.S. Short term momentum indicators are overbought (e.g. RSI at 74.01%) but continue to trend higher. Preferred strategy is to purchase/add to positions on weakness.closer to its 50 day moving average at $949.82.

Don Vialoux has 37 years of experience in the Investment Industry. He is a past president of the Canadian Society of Technical Analysts (www.csta.org) and a former technical analyst at RBC Investments.  Now he is the author of a daily letter on equity markets available free on the internet. The reports can be accessed daily right here at www.dvtechtalk.com.

Impossible! That’s what institutional investors say about “Timing the Market”. Mr. Vialoux will explain that, indeed, it can be done with the appropriate analysis. He also will explain why timing the market will be important during the next decade. Buy and Hold strategies are not working anymore; Investors are looking for alternatives. Mr. Vialoux will demonstrate four techniques that can be used to time intermediate stock market swings lasting 5-15 months. The preferred investment vehicles for investing in intermediate stock market swings are Exchange Traded Funds.

Comments in Tech Talk reports are the opinion of Mr. Vialoux. They are based on technical, fundamental and/or seasonal data that is believed to be accurate. The comments are free. Mr. Vialoux receives no remuneration from any source for these services. Comments should not be considered as advice to buy or to sell a security. Investors, who respond to comments in Tech Talk, are financially responsible for their own transactions.