Market Comments

S & P 500 (1198)
Late cycle rally may pause at resistance at 1200.

Nasdaq Index (2075)
Strong recovery may hit a wall of resistance at about 2200.

U.S. PHLX Bank Index (99.06)
Late cycle rally.

U.S. Dollar Index (86.42)
The short term recovery may be over now, and a 10 percent further decline would indicate possible base building near the 1992 low. It is still not clear that the washout is over.

TSX Index (9619)
Stage set for renewed recovery in a strong uptrend.

Canadian Dollar (79.75)
Sharp correction in the stunning uptrend could come to an end quickly. Any attempt to rally on the short term should be taken seriously.

CRB Index (300.89)
Correcting in a well established uptrend.

Gold (419.80)
Attempting to set up for a short term rally in a very mature longer cycle.

U.S. Light Crude Oil (51.85)
Sharp correction underway in a powerful underlying uptrend.

Natural Gas (7.12)
Anticipate a correction into the fall in a well established uptrend.

Market Comments

Securities prices are influenced by thousands of factors day in and day out. On rare occasions one event will stand out for its broad-based implications across the investment spectrum. The recent high achieved by the CRB index (Commodity Research Bureau) was such an event. Since then, commodity prices have nose-dived and the ripple effect has been felt throughout equities markets, fixed income, and even to some extent among currencies.

The commodities correction now underway, has been costly for those who didn't recognize the signals. This should not blind anyone to the fact that sharp corrections in powerful uptrends sometimes provide exceptional investment opportunities once they are over. The bigger the correction under these circumstances, the bigger the potential opportunity. The commodities plunge has been unrelenting, and I'm patiently watching for a reversal.