The Bottom Line
Short term caution is appropriate. An important low for equity markets in late September/October continues to line up.
A 7 chart sampling below of the 45+ Charts Don Vialoux analyses in this great Monday comment HERE.
U.S. equity index futures are higher this morning. S&P 500 futures are up 3 points in pre-opening trade. Index futures are responding to mergers and acquisition news. Potash Corp. rejected BHP Billiton’s take over offer and is actively seeking a white knight. Possible suitors include Sinochem and Vale. In addition, Hewlett Packard bid $24 per share for 3PAR. Dell previously bid $18 per share for 3PAR.
The Australia All Ordinaries Composite Index slipped 0.36% following news that the election in Australia did not arrive at a majority. The Labour party and the Liberal/National coalition each won 73 seats out of the available150 seats. The remaining four seats were won by independents. Negotiations and recounts will determine the victor in due time. BHP Billiton and Rio Tinto rallied in anticipation of a scrapping of the extra 30% tax on the profits of Australian iron ore and coal production.
The S&P 500 Index fell 7.56 points (0.70%) last week. Intermediate trend remains down. Support is at 1,010.91. Resistance is forming at 1,129.24. The Index once again found resistance near its 200 day moving average and fell last week below its 50 day moving average. Short term momentum indicators are trending down. Stochastics already are oversold, but have yet to show signs of bottoming.
The TSX Composite Index added 193.82 points (1.68%) last week. Intermediate trend remains down. Support is at 11,065.53. Resistance is forming at 11,878.35. The Index is bouncing back and forth around its 50 and 200 day moving averages. Short term momentum indictors are neutral. Strength relative to the S&P 500 currently is undetermined.
The Shanghai Composite Index added 36.20 points (1.39%) last week. Intermediate trend changed from down to neutral last week when the Index moved above resistance at 2,686.54. Short term momentum indicators are trending higher. Stochastics already are overbought, but have yet to show signs of peaking. Strength relative to the S&P 500 Index recently changed from negative to positive.
The U.S. Dollar Index added 0.10 last week and currently is testing its 50 day moving average. Support is at 80.80. Resistance and short term upside potential is to 85.03. Short term momentum indicators continue to trend higher. Stochastics already are short term overbought, but have yet to show signs of peaking.
Natural gas fell 20.90 cents (4.82%) last week. Short term momentum indicators are trending lower.
Seasonal influences turn positive near the end of August. Ditto for gold bullion!
Natural Gas Futures (NG) Seasonal Chart
Gold Futures (GC) Seasonal Chart
……Go HERE to view all 46 Charts and Commentary