TSX Index (11605)

In December 2005, I said that my unique price momentum models remained strong as we approached important year 2000 resistance at about 11424. The other day we poked above this millenium technical barrier, and since then we have held on just above it.

We are now at uptrending technical resistance, and my models suggest that a short term correction is possible from here. It would be quite surprising if price action totally ignored the year 2000 high.

My work indicates that the longer term trend remains strong.

Philly Bank Index (101.44)

In late November 2005, I was looking for a flat trading range with resistance in the 105 area and support around 92.50. Since then we have built a deliberate top below 106. In the past few days we have witnessed a nosedive.

Now we seem poised for a bounce in an otherwise steep correction, and to me the obvious short term support area from which to launch such a knee-jerk reaction would be the 100 area. Round numbers (especially 100) are not often ignored. As it turns out, the 200-Day Moving Average could also lend short term support. It currently stands at 99.76 as I calculate it.

A reasonable bounce here would be nice, but beyond that I see a real head of steam ready to carry us down through an intermediate term correction lasting at least four weeks.

Gold Futures (U.S. $543.50)

In mid-December 05 I said I wanted at least a pause in the $500 area before moving higher. We paused for a week there, and then spiked upward to exceed $550 before setting back.

This now has the look of an intermediate term top formation in a long term uptrend as I see it. If I'm right about this, it will be the sixth spike top we have made since 2001, and in every earlier case, the correction has lasted two months or more.

I've said that the long term uptrend has the energy of a freight train running at full throttle, so I hesitate to speculate on even a modest correction, but my work suggests the $550 area could be an important intermediate term stopping off point, so I'm stuck having to write it down.

I said earlier that it would be surprising if we soared through $500 without even a pause, and since then we have returned to $500 once. Another intermediate term setback to the $500 area would make sense to me now. It might set the stage for more good news over the longer term. The long term trading pattern still looks like a freight train running at full throttle.

S & P 500 Index (1288)

In late November 2005, I said we were in short term overbought territory, and I expected to launch into a top formation reaching for the 1300 area. Since then, we have formed the top I was looking for, and we brought in the New Year with a burst of enthusiasm that came close enough to 1300 to satisfy me on that score.

Now I see a micro-top possibly forming here in the coming week or so, followed by an intermediate term correction of up to six weeks duration, to the area of 1200-1225 on the index.

Taking this into account, my intermediate term stance remains neutral positive.