Nikkei Tokyo Index (15938)

The Nikkei has crept above both the 100 and 200-Day Moving Averages. Short term price momentum is lacking. Perhaps we might watch it creep along on the rising 200-Day Moving Average for a month or so. Not much energy, but a modestly positive forecast.

Nasdaq Composite Index (2140)

The short term trading pattern shows the Nasdaq stuck below its 100-Day Moving Average. The intermediate term trading pattern remains negative.

Hang Seng Index (16955)

The Hang Seng Index is approaching the area of all time high resistance at 18,301 (Mar 2000). For the moment, we appear to be in the midst of a short term corrective phase, but underlying intermediate term trend remains positive.

Market Comment (S&P 500 1296) (DJII 11304)

We are finally in the process of completing short term pullbacks from what I would define as clear breakouts above 100-Day Moving Averages for the S & P and the DJII. I had suggested in a blog published on August 20th, that I would like to see a late summer S & P rally. To be more specific, I would be pleased if the S & P and the DJII moved higher in a recovery that could take us into the month of October.

Copper U.S. High Grade Futures (345)

The price of Copper has poked its nose down through the rising 100-Day Moving Average and there is a short term possibility that it could break down through this area. If it did so, I would expect it to find support at the rising 200-Day Moving Average in the area of 285. If I were to define this as an intermediate term correction, I would have to say that the longer term trend remains strong.

Oil U.S. Light Crude Futures ($71.14)

Since last May I have repeatedly made the observation that oil is stuck below the $75 area. The situation persists. In the most recent short term corrective phase, the index has poked its nose below the 100-Day Moving Average and may be looking for support at the rising 200-Day Moving Average in the area of $67. We are looking at a determined pattern of short term price weakness, but the intermediate term trend remains strong.

Gold Futures (U.S. $612)

In my August 13th Comment, I speculated on the possible short term correction of the Gold price to the 100-Day Moving Average. We've done that and have continued on through, heading for the 200-Day Moving Average in the area of $585. I probably should define this backing and filling as an intermediate term correction on its way to completion. If I use this terminology, I would have to say the long term trend remains strong.

Canadian Dollar Futures ($88.89 U.S.)

The Canadian Dollar continues to trade in a narrow range between the rising 100 and 200-Day Moving Averages as expected. The pattern now indicates that once we break out of this narrow range we should move up to retest the recent high at $91.40. The intermediate term trading pattern remains strong.

S & P 500 Index (1302)

We finally have a clear upside penetration of the 100-Day Moving Average which has been a barrier to recovery for over two months. The tone of this index has improved to a point where I think it is appropriate to call for a late summer rally in shares related to this index.

TSX Index (S&P/TSX) 12,045

The TSX Index has successfully broken out above the 100-Day Moving Average at 11,822. Short term indications are positive and intermediate term trend remains strong.

Natural Gas U.S. Futures ($7.27)

Intermediate term recovery of Natural Gas is in evidence now, but for the time being the price is stuck between the downtrending 200-Day Moving Average and the flat 100-Day Moving Average. I assume that it will break out to the upside after a suitable period of congestion between the two moving averages.

It's only a guess, but I would not rule out the possibility of a wild ride higher into year end once this juggernaut gets rolling.

Gold Futures (U.S. $633.50)

Gold Futures appear to have completed the digestion of a huge earlier upside price spike. My work indicates that we have returned to the previous highly attractive intermediate term uptrend.

A short term correction to retest the rising 100-Day Moving Average (now at $625) would appear reasonable.

Copper U.S. High Grade Futures (351.30)

Copper has all but completed the digestion of a huge upside price spike. Short term volatility has subsided and we are returning to the prior powerful uptrend. Short term support now in the area of 338. It would not surprise me to see a retest of the short term support on the near term.

U.S. Dollar Index (85.52)

In my July Comment I said that the intermediate term downtrend might persist, and that observation has been confirmed by more recent events. Resistance at the downtrending 100-Day Moving Average now 86.35.

U.S. T-Bill Yield 91-Day (5.10%)

I must be missing something here. Yesterday the Fed paused when I expected another hike to be added to the long string of successive Fed Funds rate increases. I'm not an economist by profession, and I don't do fundamentals, but I do know that short rates are rising relentlessly in the U.S., month after month.

If there was even a hint of easing, I could relate to the Fed pause. I'll be happy if Bernanke turns out to be right about this, but my math models continue to point to rapidly rising interest rates at the short end.

Market Comment - S & P 500 Index (1275)

Many of the stocks, indexes and commodities that I follow continue to struggle beneath their 100 or 200-Day Moving Averages. In most cases, my work suggests probable failure to break out above resistance.

In my August 1st, 2006 Market Comment, I said that the S & P 500 Index might have enough short term strength to push up through its 100-Day Moving Average. It did break out last week, but this still wasn't good enough.

In order to call for an end to this market correction, I need to see a large number of stocks and indexes looking perky, and it simply hasn't happened so far. We are snarled up under moving averages right now, and I'm watching closely for a clue to the direction of the next important market move.

Natural Gas U.S. Futures (Fri. close $7.18)

Natural Gas is showing signs of life on my short term models but remains disappointing in my intermediate term work. Natural gas trading is seasonal in nature and often makes huge price moves into year end. My intermediate term work says if it's going to happen this year, it's not ready to go yet.

Gold Futures (Fri. close $634.80 U.S.)

As is the case with many metal commodities, Gold is unwinding a huge price spike which occurred in the first quarter of 2006. Short term models continue to regain strength with the share price having successfully tested support at the 100-Day Moving Average ($616 area).

I continue to anticipate a choppy trading pattern as the spike digestion plays itself out. The underlying intermediate term price trend remains strong.

Oil U.S. Light Crude Futures (Fri. close $73.24)

In my May 20th Comment, I said that oil appeared to be stuck below the $75 level on the short term. This situation persists and I look for short term support in the area of the 100-Day Moving Average at $70. Intermediate term outlook remains strong in my opinion.

Canadian Dollar Futures (Fri. close $88.48 U.S.)

In my May 24th, 2006 Comment, I called for a short term correction to retest support at the uptrending 200-Day Moving Average. This retest occurred a week ago, and we are now stuck in a narrow trading range between the 100 and 200 Day Moving Averages.

While the intermediate term trend remains positive, I am not yet ready to call for short term recovery from here. Perhaps we need more work in the short term trading range between the two moving averages. Short term weakness persists.

Nikkei Index (Fri. close 15,343)

The Nikkei is making a second attempt to penetrate the uptrending 200-Day Moving Average. There is no real encouragement to assume that this attempt will succeed. I must reluctantly assume that the intermediate term trend is negative at this time.

TSX (S&P/TSX) (Fri. close 11,759)

The TSX is making a third attempt to penetrate resistance at the 100-Day Moving Average. Underlying intermediate term trend remains strong.

U.S. T-Bill Yield 91-Day (Fri. close 5.06 percent)

As expected, we have now pushed through 5 percent on the T-Bill and we appear to be retracing to test this level before moving on upward. No cessation in the powerful intermediate term momentum on the upside. It's hard for me to picture a pause in fed fund rate hikes as is generally anticipated. My work suggests that rate hikes should continue unabated.

S & P 500 Index (Fri. close 1278)

The S & P 500 Index is backing off from a third attempt to penetrate its 100-Day Moving Average on the upside. Short term prospects for eventual penetration appear to be favorable. If this occurs, it may mark the end of the summer correction which I called for in May of this year. I'm watching this carefully.

Nasdaq Index (Fri. close 2094)

The Nasdaq Index remains in a persistent intermediate term downtrend.

Hang Seng Index (Fri. close 16,995)

The Hang Seng Index is showing signs of continuing intermediate term strength following a general market correction. Short term resistance is at 17,300. The chart remains healthy.

CRB Index (Fri. close 386.47)

The CRB Index is stuck below 400 for the moment. The intermediate term trend remains strong.

Philly Bank Index (Fri. close 111.40)

It looks like the Philly Bank Index will attempt a double top in the 113 area on the short term. It simply refuses to roll over. The strong 200-Day Moving Average is not confirmed by my intermediate term math models. A flat intermediate term trading pattern?