Natural Gas U.S. Futures ($13.06)

Finally we appear to be building an important intermediate term top after all but touching $15 in the process. I was looking for a top formation here, but it took longer than expected to fall into place.

If I'm right about the intermediate term status of this top, it should not be ignored even if the longer term trend continues to remain healthy.

CRB Index (331)

On October 19, 2005, I said that the Commodities Research Bureau Index had slammed into resistance that had been in place since 1980. Very important resistance, and we are witnessing the correction that I expected. However, I want to modify the tone of my analysis.

It may take some work to penetrate this long-standing resistance level - something more than what I would call a short term selloff. Having said this, I'm not a bear on the long term outlook for commodities.

If we take a good rest at these price levels before moving on, most resource producers will make money hand over fist while waiting for the next market leg up.

S & P 500 Index (1179)

In my September 27, 2005 Blog Comment on the S&P (1215) I said I would be more comfortable when we settled lower to the 1150 area.

I am now satisfied that we met this objective the other day, which brings me to one of my earlier comments about a trading range between 1150 and 1250. I haven't really seen a short term buy signal yet from my unique price momentum models. I'm jumping the gun a bit when I suggest that another attempt to challenge 1250 appears possible once base building is complete. Bias positive beyond the near term as well.

Intel INTC ($23.16)

Intel's share price has broken down below a rising trendline that has provided reliable support on the daily chart since late 2002. It's hanging on, in what looks like a breakdown pullback below the trendline, and hinting that it could recover, but it sure looks ugly to me.

CRB Index Reminder (335.07)

In a blog comment posted on October 13, 2005, I pointed out that the CRB Index had slammed into all time high resistance that has been in place since 1980. Since then, the TSX Index and a number of important commodities have set back sharply from recent highs.

It is now obvious that this CRB resistance roadblock is real. The commodities disgorgement is in high gear on the downside as I write, and we may be looking at something more than a short term selloff.

On the other hand, precipitous selloffs often retrace on the upside equally quickly, long term top or not. I'm watching my unique price momentum models carefully to see if I can detect a short term low that will produce a trading opportunity.

CRB long term resistance is very, very important.

Market Comment (S&P 500 1178)

On August 20, 2005 I posted a MARKET ALERT. With the S&P 500 then at 1220, I postulated that a short term market correction was around the corner. Too many of the approximately 200 companies I follow had shown clear top signals on my unique price momentum models.

I said most groups, including the high flyers, were likely to get hurt. For greater detail take a look back at my ALERT posted on August 20, 2005.

As I write today, we are in the midst of the correction I foresaw at that time.

Copper U.S. High Grade Futures (188)

The price of copper paused for six months in the area of 130. It did the same thing again at 160, and here we are pushing 190. It would not surprise me if we backed and filled in the 190 area for now.

This does not detract from my view that we remain in a powerful long term uptrend.

In a recent blog comment on the CRB Index, I pointed out that this index is now at important 25-year high resistance level that should not be ignored. Copper and many other commodities will be influenced by what transpires as the CRB struggles with all-time high resistance.

Oil U.S. Light Crude Futures ($64.12)

Since oil peaked at $70 in late August, it has settled into a relatively flat trading range above $60 short term support. I would not be surprised if we continued to mark time in this way for weeks into the future.

My unique price momentum models indicate that the powerful underlying long term price uptrend remains intact.

In a recent blog comment on the CRB Index, I pointed out that this index is now at important 25-year high resistance that should not be ignored. Oil and many other commodities are components of this broadly based index.

U.S. Dollar Index (89.63)

Back in August I said I thought that the recovering dollar was stuck below 90, with support in the area of the 200-Day Moving Average at 85.

Since then it has moved lower to 85 and recovered, but it is now stuck below 90 as I suspected. I also suggested that if we successfully tested the 200-Day MA support (at 85), it would lend credence to my view that a real recovery had been launched.

We may still have more work to do before we push up through the resistance barrier at 90, but in my view the tone is positive looking beyond the near term.

Nikkei Index (13463)

Perhaps we are finally building the intermediate term top that I started looking for in late August. The long term chart is still powerful, but appears to be overbought. Under these circumstances I would now be satisfied if we drifted sideways for weeks or months to let off a little steam.

U.S. T- Bill Yield 91-Day (3.71 percent)

My long term proprietary price momentum models simply refuse to provide a sell signal, and the yield soars through every short term resistance target I can find.

Once again we are at resistance. This time it's trendline resistance on my long term (monthly) chart. However, as I write, my short term momentum model is launching an upside assault that could be succcessful. I have to assume we will once again go higher from here.

Hong Kong Hang Seng Index (14575)

It's just possible that the recovery that began in 2003 may now have come to an end.

First support in a correction is on an uptrending line that is now in the area of 14225. This trendline is almost coincident with the uptrending 200-Day Moving Average that could also lend support for the time being.

Philly Bank Index (93.28)

My longer term proprietary price models keep warning of problems ahead for U.S. bank shares. I expressed these concerns in my August 30/05 comment on the banks, and since then the index has sold off sharply.

We will soon be in short term oversold territory, but it's little comfort if I look out beyond the end of my nose.

CRB Index (337.07)

The Commodity Research Bureau Index has finally slammed into all-time high resistance established back in late 1980 !

So far, there is no evidence in my proprietary price momentum models to suggest a downturn from this historic resistance barrier, but it would be surprising if we did not see at minimum, a pause or a short term setback.

So here we have a HUGE resistance barrier in a POWERFUL uptrend. This argument has not been settled yet on the CRB Index chart. If we turn down from here, the short term negative implications for oil, gold, copper, grains and other commodities could be extremely important. A downturn from here would also suggest that we might have passed a major long term CRB Index peak.

Nasdaq Composite Index (2037)

In a blog comment last May, I initially referred to a wall of resistance at 2200. In early August we hit it, and retreated for the third time in two years (a head and shoulders pattern).

Now my long term work has gone negative. Nasdaq is at an important crossroads on the long term chart. It is possible to interpret the recent recovery as a "B" wave in a huge downtrend that began in the year 2000. The implications of such an interpretation would be negative indeed, and I do not want to jump to conclusions here.

For now I'm watching a real short term correction with round numbered support at 2000, and below that, support in the area of the recent intermediate term low at 1900. I'll re-assess the long term outlook once firm short term support has been successfully re-established. Bias negative.

Expensing Options

Today A CNBC observer mentioned the potential impact of expensed options on Apple Computer earnings. It will be interesting to see whether or not expensed options are a meaningful factor in high tech quarterly reports this time around. I understood that U.S. legislation to force the expensing of options was to come into effect around mid year.

In my view we're dealing with an accounting nightmare, a huge mistake, and an even bigger dark horse for markets from here on in. The whole idea has been under a veil of silence, so much so, that I have never heard anyone say the legislation actually became law. It's either a tempest in a teapot, or a category five hurricane. We will know the answer soon enough.

Market Comment (DJII 10286)

Do you remember the old saying "What's good for General Motors is good for America?" How things have changed. This morning we learned that Delphi Automotive is bankrupt, and we have a first mention of the possibility that GM will declare bankruptcy. In my opinion the DJII should have tanked on such speculation.

But then problems of this magnitude are not new to the greatest nation of our age. I was shocked when the American steel industry was left to die in the waning years of the previous century. It seemed to me that steel would be essential when the time came to build tanks to defend precious freedom. To add insult to injury, the steel stocks were removed from the Dow Jones Industrial Average and replaced by Peter Pan (Here I refer to Disney of course). What has Disney to do with the industrial backbone of the greatest nation on earth?

Next, I watched as the U.S. began losing control of its energy supplies, and today I see Americans tipping on the verge of voting to abandon the areas of the world that are essential to prevent the lights from going out in their own homeland.

Of course you don't need GM if you have no steel to make tanks and you have no fuel for the tanks. So I guess it's some sort of eerie logic that brings us to the point where GM might go into bankruptcy.

This is not a joke, because it's an ugly world we live in. If you cannot make steel, and you have no fuel, and you can no longer build tanks (GM builds tanks), you're a sitting duck.

Frankly, I didn't believe the story about how Rome fell from greatness in a single generation until I realized I might be witnessing an identical tragedy in my own lifetime. Deja Vu. Am I the only one to realize that the emperor has no clothes?

The United States is still the greatest nation on earth. In our age, Great Britain laid out the roadmap for freedom, and the U.S. followed that map to show the world the meaning of greatness. What manner of blindness has overtaken the citizens of the Blessed Land?

Our entire planet will plunge into chaos if American freedom goes down the drain. I see it happening before my eyes. There's nothing I can do about it. America's detractors, both within and without, should realize that there are no winners in the struggle to topple the world's greatest nation. If they win, they lose. Everybody loses ... everything.

Gold Futures (U.S. $468.50)

My own proprietary price momentum models indicate that gold is in a powerful long term uptrend, but significantly overbought at this time. My long term (monthly) models and my intermediate term (weekly) models confirm the overbought condition, but there is a hitch. I'm still waiting for a sell signal from my trusted short term (daily) momentum models. So far no short term sell signal.

I have a hard time seeing gold above $470 U.S. under these circimstances, but I'm stuck waiting for time to take me onside before I commit to a short term sell position.

These models often confirm changes in unison. The fact that the short term sell signal for gold is so reluctant to arrive is a testament to the underlying strength of the gold price trend.

TSX Composite Index (10820)

During the current recovery period, this index has retreated from resistance at 7000, 9000 and 10,000 before moving on through each of these important price barriers. In all cases the setbacks lasted for two months or more.

The other day we slammed into resistance at 11,000 for the first time, and as I write we are selling off quickly. Previous selloffs from round numbered resistance levels have not impaired the long term recovery trend, but short term damage has been meaningful.

It remains to be seen if the selloff from the price barrier at 11,000 will reach beyond the short term to produce more serious negative results. In any event I am taking it seriously.