Equity markets picked up where they left off last week, continuing to trade above resistance levels that fell last week such as 5,000 for the DAX (German30 CFD), 8,600 for the Dow Industrials (US30 CFD), 930 for the S&P 500 (SPX500 CFD) and 1,500 for the NASDAQ 100 (NDAQ100 CFD). A number of factors appear to have provided a boost to the bullish cause including a better than expected U.S. leading indicator (0.7% vs. street 0.5%), indications that CIT may be able to get interim financing to help it avoid bankruptcy and better than expected earnings reports out of the industrial sector from companies such as Eaton (NYSE: ETN, Stock Forum) and Johnson Controls (NYSE: JCI, Stock Forum). Next key resistance levels for U.S. markets include 8,900-9,000 for the Dow, 950 then 1,000 for the S&P. and 1.600 for the NASDAQ.
Commodity prices have also been climbing this morning, led by gold and silver, which have rallied toward the $950/oz and $13.65/oz levels with next resistance near $980/oz and $13.80/oz respectively. Copper has also been advancing, trading near $2.45/lb with significant resistance possible near $2.50. Energy has been mixed with U.S. crude regaining the $65.00/bbl level but natural gas falling back to test $3.50/mmbtu.
The general increase in commodity prices appears to have given Canadian indices a lift with the S&P/TMX 60 (Toronto60 CFD) breaking through 630 and the S&P/TMX Composite breaking through 10,500. Next resistance levels for these indices appear near 605 and 10,750 respectively.
It’s a busier week for economic developments in Canada than the U.S. this week, which suggests that U.S. markets may focus more on the flood of corporate earnings reports scheduled to come out.
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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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