Equity markets appear to be heading to end the week on an upswing, building on yesterday’s late-day momentum. Overnight earnings reports tended to be neutral or better than expected, with investors responding positively to reports from Ford (NYSE: F, Stock Forum), American Express (NYSE: AXP, Stock Forum) and others. U.S. economic data also appears to be helping the bulls’ cause today with both durable goods (-0.8% vs. street -1.5%) and new home sales (356K vs. street 337K) coming in better than had been feared. Despite all of this good news, however, equities have been unable to overcome resistance that has provided the cap of current trading ranges. This suggests that some lingering concerns, most likely surrounding the health of the auto (possible bankruptcies) and banking (stress test results) sectors still appear to be overhanging the markets.
Key resistance levels currently being tested that may provide an obstacle to equities in the near term include 8,100-8,200 for the Dow Industrials (US30 CFD), 875 for the S&P 500 (SPX500 CFD), 1,375 for the NASDAQ 100 (NDAQ100 CFD) and 580 for the S&P/TMX 60 (Toronto60 CFD). Should these be breached, next resistance may occur near 8,350 or 8,500 for the Dow, 935 for the S&P, 1,450-1,500 for the NASDAQ and 600 for the 60.
Commodities have also been generally been gaining strength as the morning has progressed. Copper has moved up from a successful test of $2.00/lb support to trade near $2.05 with resistance closer to $2.10/lb. U.S. crude oil has broken through $50.00/bbl once again and has been trading near $51.25/bbl with resistance near $53.00/bbl. Gold and silver appear to have eased off a bit from their highs but continue to trade between $900-$925/oz for gold and $12.50-$13.00/oz for silver. Grains have also been steady today with wheat holding near $5.30/bushel and corn holding near $3.80/bushel.
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This commentary is based upon technical analysis. Technical analysis is the study of price and volume and the interpretation of trading patterns associated with such studies in an attempt to project future price movements. Technical analysis does not consider any of the fundamentals of an underlying company, and as such is inherently uncertain and should not be the only factor considered by an investor in making an investment decision.
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