A number of positive developments overnight and this morning have propelled equity and commodity markets significantly higher this morning. These include: better than expected earnings reports and guidance from companies such as Intel (NASDAQ: INTC, Stock Forum) and Gannett (NYSE: GCI, Stock Forum), along with a relatively benign U.S. CPI number (+0.7% over month, -1.4% over year), and better than expected Empire Manufacturing (-0.5 vs. street -5.0) plus industrial production (-0.4% vs. street -0.6%) reports. In addition, a bigger than expected decline in crude oil inventories (-2.8 mmbbls vs. street -2.1 mmbbls) appears to be helping support early gains in energy markets.
In commodity trading today, gains have been led by copper, which has rallied 3.9% toward a test of $2.40/lb resistance. Precious metals have also been climbing with gold breaking through $925/oz and jumping toward $940/oz and silver trading near $13.20/oz after taking out $13.00 resistance. U.S. crude has moved back above $60.00/bbl today and has stabilized near $60.50. Grains have also been rebounding today with wheat trending toward a test of $5.50/bushel and soybeans continuing to climb taking out $10.50/bushel resistance today after successfully establishing support near $10.00 recently. The one exception today has been natural gas which has retreated back toward $3.35/mmbtu after hitting resistance near $3.50/mmbtu and ahead of tomorrow’s inventory report.
Equity markets have also been climbing within their current trading channels suggesting that investor sentiment appears to be becoming more cautiously optimistic about the coming round of corporate earnings reports and guidance. The Dow Industrials (US30 CFD) have regained the 8,500 level today with next resistance near 8,650 then 8,900. The S&P 500 (SPX500 CFD) has been testing 925 resistance with next resistance looming in the 950-960 range. The NASDAQ 100 (NDAQ100 CFD) has been testing 1,500 resistance with the next key resistance level near 1,600. Canadian markets have been on a tear this morning with commodities advancing. The S&P/TMX Composite blasted through 10,000 and its 50-day average and next faces resistance near 10,350 then 10,600 on trend. Meanwhile, the S&P/TMX 60 (Toronto60 CFD) has been trending toward a test of 625 resistance potentially followed by 650-660.
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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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