Market Comment

I follow a variety of indexes, currencies and commodity prices and make an effort to review each forecast on a weekly basis.

While I cannot guarantee this, readers may assume that the most recent comment on any index, currency or commodity followed, is my up-to-date opinion.

Copper U.S. High Grade Futures (343.95)

Over the short term Copper continues to drift sideways as it straddles the 100-Day Moving Average. Short term indications call for more of the same.

We are in an intermediate term digestive phase following the sharp spike into May of this year. The intermediate term outlook remains positive.

Oil U.S. Light Crude Futures ($60.55)

As expected, Crude Oil has dropped to upside trend support in the $60 area. I can now see the prospect for recovery from this level on my short term model.

The underlying intermediate term trend remains positive and now indicates an oversold condition.

Nasdaq Composite Index (2219)

I have recently gone to a positive intermediate term stance on the Nasdaq Index. What I'm seeing now is the tendency on the short term to get sticky in the process of upside penetration of the 200-Day Moving Average. We may need a pause, or perhaps a modest short term correction here before moving on upward.

Gold Futures (U.S. $576.40 Fri. close)

As I see it, Gold is still busy digesting the $725 spike high that occurred in May/06. It has broken down through its 100-Day Moving Average, and poked its nose below its 200-Day Moving Average on my charts.

I believe that we are in the final ("C" wave) downside leg in the short term correction that could eventually take us to the $500 area from here. The underlying intermediate term uptrend remains intact. I would expect that in the absence of inflationary tendencies, gold producers would consider $500 to be extremely attractive in profitability terms.

Nasdaq Composite Index (2222)

As anticipated, Nasdaq has now poked above its 200-Day Moving Average resistance level. For now I expect steady moderate short term gains to continue.

I have recently gone to a positive intermediate term outlook following the completion of the correction that began in May of 2006.

CRB Index (367.51 Fri. close)

The CRB Index followed along the uptrending 100-Day Moving Average for months. This past week it finally penetrated down through the 100-Day and poked its nose down through the rising 200-Day Moving Average as well.

Once short term downside pressure subsides, it would seem reasonable to me to track along the uptrending 200-Day Moving Average for a month or so. Near term support is at the recent 364 low. Intermediate term uptrend support is at approximately 350.

We are marking time here in the process of digesting earlier rapid gains, without thus far damaging the positive underlying intermediate term trend.

TSX Index (S&P/TSX) (11708)

As expected, the TSX Index pushed below its 100 and 200-Day Moving Averages this past week. Short term uptrending support is at approximately 11300. Failing this, the next support level is at the recent low (approx. 11000). The intermediate term trend remains positive, but short term downside pressure is significant.

S & P 500 Index (1318)

As expected, the S & P Index is now nudging up under the 1326 May/06 high resistance level. If anything, it seems a bit early in a rally I expected to extend into October.

While the intermediate term outlook remains positive, I now look for short term backing and filling below the 1326 resistance level over the short term.

During the summer months, we often experience a crescendo of bearish prognostications concerning prospects for Sept/Oct. I was definitely out of step with the street when I offered a positive outlook. Fortunately, my math models do not respond to street opinions, and as it turns out we have seen a pleasant rally into September.

Natural Gas Futures ($5.07)

Natural Gas has gone below short term support at $5.50 and the next obvious support level is at lows that have been in place since 2003 (in the area of $4.50).

The intermediate term outlook is also deteriorating. I have therefore moved to a negative view beyond the near term. Earlier I had written about the seasonal price strength that often shows up in the fourth quarter. No sign of it this year. Just the opposite so far.

U.S. Dollar Index (Fri. close 86)

The U.S. Dollar Index has quietly crept above its downtrending 100-Day Moving Average. Short term resistance now in the area of the downtrending 200-Day Moving Average at approximately 87.

Beyond the modest short term upside momentum, the intermediate term trend remains firmly negative.

Nikkei Tokyo Index (15867 Fri. close)

As expected the Nikkei has recently tracked sideways along its coincident 100 and 200-Day Moving Averages.

While the intermediate term outlook remains positive, it would not surprise me to see a gradual correction toward the recent low in the area of 14200 in the weeks ahead.

Oil Light Crude Futures (U.S. $66.25)

Crude Futures have shown surprising short term weakness, having poked down through 200-Day Moving Average support in the area of $67.50. I had expected that over the short term, oil futures would hold at this Moving Average. As I write today, I get no encouragement from my short term math models to suggest that the price will hold here. As a result, I am forced to look for a new support level below the 200-Day Moving Average. Upside channel support shows up in the $60 area.

In spite of the short term snit we are in, the intermediate term trend remains strong.

Canadian Dollar Futures (U.S. 89.28 cents)

The Canadian Dollar has now dropped below its 100-Day Moving Average, having failed to penetrate the May/06 high at 91.40 cents. Over the short term a retest of the 200-Day Moving Average, now in the area of 88.05 cents, appears possible.

Once short term downside pressure subsides, I expect another attempt to move above the May/06 high in a healthy intermediate uptrend.

U.S. T-Bill Yield 91-Day (4.93)

The T-Bill Yield has now poked its nose below the 100-Day Moving Average after touching 5 percent earlier in the year. We are looking at persistent short term momentum erosion which is not surprising in view of the recent attempt to push through the 5 percent barrier. Beyond the near term, there is nothing to indicate a reversal of the trend to higher rates, but short term resistance at 5 percent has turned out to be very real.

TSX Index (S&P/TSX) (11869)

The TSX Index has now pulled back to its 100-day Moving Average after attempting to penetrate its all-time high in May of this year. Over the short term I will not be surprised to see a downside penetration of the 100-day Moving Average.

While the intermediate term outlook remains strong, short term digestion issues could dominate trading activity.

CRB Index (383.55)

Over the short term the CRB Index is marching along the rising 100-Day Moving Average and stuck below 400 resistance, all-time high first established in May/06. Intermediate term outlook remains positive.

Philly Bank Index (110.10)

The Philly Bank Index is stuck below the all-time high resistance at 113, first established in May/06. Losing momentum on the short term and neutral intermediate term.

Natural Gas Futures U.S. ($5.88)

Natural Gas Futures appear determined to retest the recent low in the area of $5.50. I had assumed that there might be the prospect of launching the seasonal recovery that often leads to attractive gains by year-end. Sorry to say that short term momentum must again be described as abysmal. Intermediate term math models still suggest that a recovery is in the works once the current setback has run its course.

Nasdaq Composite Index (2193)

The Nasdaq Index has now struggled up through its 100-Day Moving Average, and next I expect it to struggle up through 200-Day Moving Average resistance presently in the area of 2224.

I now have a positive view of prospects for the Nasdaq beyond the near term.

S & P 500 Index (1311)

In an August 20th blog, I called for a rally that could take us into October. The rally is now well underway, with short term resistance in the area of the recent high at 1326.