Copper U.S. High Grade (168.75)

Copper makes dogged stepwise progress in a powerful uptrend with surprising longer term underpinnings. (Surprising because copper normally falls into the most cyclical of cyclical categories). If we break out above short term resistance in the 170 area, I expect that it will take several months or quarters to reach above the 180 level. All in all, a very positive picture.

S & P 500 Index (1234)

I had previously said (1205) I thought we were in summer doldrums building up a head of steam for a healthy continuing recovery. We are now drifting into my recovery forecast, reaching for uptrend channel resistance at about 1270 in an otherwise quiet market.

CRB Index (308.02)

On June 1, 2005 I said I was looking for a rally in a strong long term uptrend. After that, the index approached 320, and rolled over into a short term correction.

Uptrending intermediate term support stands at around 295 as I write. If we are to see another leg on the upside after this correction is over, it looks like we may need several months of base building in the 300 area to work off our current overbought status. A short term breakdown below 295 would be unhealthy.

U.S. T- Bill Yield 91-Day (3.38 percent)

In my June 8th comment (3.04 percent), I said we were losing steam quickly and I asked whether or not we might see a top by the time we reached 3.25 percent. The answer turned out to be a resounding NO.

Now we are approaching technical resistance in the 3.5 percent area, and my math models still indicate that we are overbought. I'm looking for a top here, but suitably respectful of the strength of the underlying upward thrust.

Canadian Dollar Futures (82.15)

On May 19th, 2005 (79.75) I said I was looking for a short term rally. That rally now appears to be over. On a short term basis we are in an unusual situation that has seen both the Canadian and U.S. currency rising at the same time. Something has to give here. For starters, on the short term I'd like to see the Canadian dollar drop off to 80 cents or below that level. Beyond the near term, I expect that we will be looking at a weaker Canadian dollar, but so far my math models have only moved to neutral - still a big adjustment from the stunning uptrend that was still in place when I last commented on the loonie.

Gold Futures (U.S. $425)

On May 27, 2005 (Gold $419.80), I said that gold was setting up for a short term rally in a very mature longer cycle. The rally quickly peaked above $440. Since then, the gold price has retreated to below $420, and it is now in the process of repeating the recent rally in a tightening short term wedge formation. This time I'll be surprised if it makes it above $440, but that's not my concern right now.

There is a possibility that in the weeks ahead gold will break down out of the short term wedge now being completed. The math model for the long term trading pattern suggests that we may now have passed an important long term price high.

The Chinese abandonment of its U.S. dollar currency peg ushered in the potential for a complete sea change in the valuation of the U.S. dollar, which is a mirror image of the price of gold. It only makes sense that U.S. dollar forecast strength would call for gold price weakness ahead.

Phlx Semiconductor Index (468)

The Semiconductor Index is on a bit of a roll with downsloping resistance around 510. The 500 area has frequently shown up as an important support or resistance level over the previous five years, and I'm looking for more of the same this time as we approach it from beneath. It would not be surprising to see an intermediate term correction after testing the 500-510 area on the upside. The longer term trading pattern is viewed as neutral-positive.

Tokyo Nikkei Index (11765)

The Nikkei Index is making its sixth attempt to break out above the 12000 level since 2002. The intermediate term trading pattern suggests this attempt will peter out in the 12000 area within weeks, and there may be a new problem developing. The longer term underlying trading pattern is now weakening. This would suggest that we may be seeing the final thrust at the windmill for some time to come. Can you detect my lack of enthusiasm?

Nasdaq Composite Index (2156)

Back in May 2005 (Nasdaq 2075), I said that in a strong recovery we could hit a wall of resistance in the area of 2200. We're knocking at the 2200 resistance door now, and the underlying trading pattern is gaining strength. 2200 will still likely cause a short term problem, but I now think that after backing and filling, we will break above it. If we do, it will pretty well wipe out my June assumption that we might move lower out of this trading range beyond the near term. I'm revising my intermediate term view to bias positive rather than bias negative.

Hong Kong Hang Seng Index (14504)

In my June 2005 comment, I said that the Hang Seng Index was stuck in a short term trading range. It has poked its nose above 14000 four times since late 2004, and failed each time below resistance at 14300, until now. This time we have a modest breakout that looks like it could blossom into something worthwhile, so I am moving from a neutral to a positive intermediate term outlook for the Hang Seng Index.

TSX Index (10177)

In late May (9619) I said the stage was set for renewed recovery in a strong uptrend. We are now in the midst of the upward thrust, and short term resistance is in the 10500 area in an aggressive uptrend channel.

U.S. Natural Gas Futures ($8.13)

I had hoped natural gas would take a bit of a rest during the summer months. Instead, it has been backing and filling below well established uptrend resistance now in the $8.37 area. No hint of anticipated weakness. The underlying math model is now strengthening, and suggesting an early fall rally once resistance is penetrated.

U.S. Light Crude Oil (59.63)

Light crude remains in a strong long term uptrend, and has satisfied my short term $60 area upside target. Now I would like to see a sharp short term correction to the $50 area (give or take $3), once this top formation has been completed.

U.S. Dollar Index (90.40) Comment

The U.S. Dollar Index exceeded my short term upside expectations by a wide margin prompting a major revision of my longer term view. I now suspect that the 2004 low could prove to have been the long awaited longer cycle low. The push above 90 on the index has taken us into wildly overbought territory for the moment. The index could work off this overbought condition on the short term by getting stuck for a while around the 90 level.

S & P 500 (1205) Comment

Since late May I have been of the opinion that the S&P should pause in the 1200 area, in a positive longer term environment. I still think we're stuck moving sideways for the near term, but we're also building up a head of steam for a healthy continuing recovery once this quiet period is over. Summer doldrums.