The Bottom Line
‘Tis the season to be cautious! The period of seasonal strength for most sectors and equity markets recently ended. Selected sector trades such as agriculture, gold and energy are lining up as interesting seasonal trades this summer. However, timing of their entry is premature. They appear to be forming base building patterns for possible entry in July/August.

The Dow Jones Industrial Average dropped 290.32 points (2.33%) last week. Intermediate trend is up. The Average returned to below its 50 day moving average last week. Short term momentum indicators are oversold, but have yet to show signs of bottoming. Strength relative to the S&P 500 Index has turned negative. Support is at 11,555.48. Resistance is at 12,876.00.

The TSX Composite Index fell 279.68 points (2.03%) last week. The Index once again found resistance near its 50 day moving average. Intermediate trend is up. Short term momentum indicators are approaching oversold levels, but have yet to show signs of bottoming. Strength relative to the S&P 500 Index has turned positive. Support at 13,237.93 and its 200 day moving average at 13,220 is being tested.

Gold gained another $5.98 U.S. per ounce last week. All of the gain was recorded on Friday. Weakness in the U.S. Dollar was an important contributor. Short term momentum indicators are overbought, but have yet to show signs of peaking.

The U.S. Dollar fell another 0.76 (1.01%) last week. Intermediate trend is down. Resistance is forming at 76.37 near a previous resistance level. The Index remains below its 50 and 200 day moving averages. Short term momentum indicators have rolled over and are trending down, but have yet to show signs of bottoming.

Be Sure to Check out the other Charts and commentary at Don’s daily update HERE