A 5 chart sampling and the Bottom Line taken from the comment plus 45  Charts Don Vialoux analyses in this great Monday comment HERE

Be sure to read Don’s Weekend Article Agriculture – A Golden Harvest

The S&P 500 Index gained 55.38 points (5.42%) last week. The gain last week is typical of a short term recovery within an intermediate downtrend. The gain last week occurred on lower than recent volume. In recent weeks its 50 day moving average (currently at 1100.30) has proven to be a reliable short term resistance level. Short term momentum indicators are recovering from oversold levels. MACD shows encouraging divergence relative to the Index’s intermediate downtrend.

The TSX Composite Index added 374.39 points (3.34%) last week. Intermediate trend remains down. A “Death Cross” likely will occur this week. Short term momentum indicators are recovering from oversold levels and have short term upside potential. Strength relative to the S&P 500 Index remains positive, but is showing early signs of change. Short term upside potential is to its 50 day moving average currently at 11,711.88.

The U.S. Dollar fell another 0.46 last week. Continuing weakness below its 50 day moving average is significant because previously the average acted as support. Short term momentum indicators are oversold, but have yet to show signs of recovery. Support is indicated near 82.24. Chances of a short term recovery are high. If recovery is to its 50 day moving average and if resistance appears, intermediate trend of the U.S. Dollar changes from up to down. Confirmation of an intermediate downtrend of the U.S. Dollar when it occurs will have important ramifications for equity and commodity markets.

Gold was virtually unchanged last week. Intermediate trend remains up. Technical action was mildly bullish on Friday when gold bounced without testing support at $1,166.50. Short term momentum indicators are oversold and trying to recover. Strength relative to the S&P 500 Index remains positive. Resistance is at its all time high at $1,265.00. According to Thackray’s 2010 Investor’s Guide, gold’s period of seasonal strength starts today and continues to October 3rd.

Gold equity indices and related ETFs also are showing early technical signs of recovery. The AMEX Gold Bug Index, the Philadelphia Gold and Silver Index and the Market Vectors Gold Miners ETF (Symbol:GDX) moved above a five day trading range on Friday triggering a short term technical reversal. Short term momentum indicators are oversold and showing early signs of recovery. Strength relative to the price of gold remains positive, an encouraging technical indicator for both gold and gold equities. Suggested strategy changes to “Initiate positions at current prices and add on weakness”.

Fin Reg becomes an issue this week. Congress returns from recess. Passage through the Senate is far from assured. Many questions about content and impact remain unanswered.

What about “Death Crosses”? Several more likely will occur this week. Forget about “Death Crosses”! They are great “talking points” for the media, but they are not relevant over the intermediate term.

Short term technical indicators have recovered from deeply oversold levels and in many cases no longer are oversold.

Intermediate technical indicators remain bearish for the most part. Many key indices already are approaching key resistance levels and/or their 50 day moving average where resistance is likely.

Currencies remain a focus. The Euro has gained 6.7% in five weeks, an extraordinary event considering the political and economic realities in Europe. It is substantially short term overbought and due for a correction. Look for a corresponding recovery in the U.S. Dollar.

Equity markets during a U.S. mid term election year have a history of moving lower from July to September.

The Bottom Line
Nice recovery bounce last week! Additional strength is possible this week. However, the intermediate seasonal, fundamental and technical outlook remains unfavourable. Strength is an opportunity to increase cash positions. Exceptions exist. Selected sectors with favourable seasonality and improving short term technicals are purchase candidates at current prices and on weakness. Selections must also have positive strength relative to the market.

….read more and view many more Charts HERE

Be sure to read Don’s Weekend Article Agriculture – A Golden Harvest