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fib_1618

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US Equity Markets:

The NYSE composite A/D line finished this past week with a slight break of its 6 1/2 month accelerated uptrend just as the SPX found technical price resistance at around the 1295-1300 level which were the summer of 2008 highs before the fall crash. Although not of high concern at this stage, we should respect this break of trend for what it may imply moving forward given this important technical price resistance area.



T
he NYSE common only A/D line was able to come within 370 net advancers from matching its all time highs but then moved sharply lower for the rest of the week. Although this could indeed turn out to be the pause to refresh that we've been looking for prior to the actual full out challenge of these same highs, it will be important for the bulls to remain above the accelerated rising bottoms line (shown in orange) for this to happen over the next 4-6 weeks.



The NYSE preferred only A/D line remains above its longer term rising bottoms line. As long as this continues, this would add considerable weight to the idea that last weeks lack of bullish follow through was to allow more time for clarity.



US Interest Rates:

The
NYSE Bond CEF A/D line continues to remain above its December lows in what looks now to be an attempt to construct a base. Given the amount of excess liquidity still yet to move into this asset class from commodities, we might even be looking at a some sort of horizontal base to form over next several weeks. If this were to occur, this would then lend support to equity prices for at least another couple of months. A break below the December/January lows, however, would have longer term bearish implications for the markets overall.



US Real Estate:

There are no real changes this week with the NYSE REIT A/D Line as it, and the price action, remain in bullish sync with each other.



Precious Metals:

The Precious Metals A/D line and XAU A/D line continued to weakened substantially last week and this accelerated the downtrends in both the price of gold and the XAU price index. Potential price pattern support for gold continues to come in around the $1325 level, with the same structural support coming in for the XAU at 195. How we negotiate these price levels will go a long way in establishing the longer term importance of this current sell off.






Australia:

The XAO A/D line continued its effort to inch higher last week allowing the XAO price action to come within 60 points of its April highs. However, until this A/D line is able to take out its November 2010 highs, and especially the longer term declining tops line from October of 2009, it's not likely that the price action will be able to move decisively above these same April highs, and with it, a simple double top pattern formation would be the likely outcome.



England:

The bearish divergence noted between the FTSE cumulative A/D line and the FTSE price pattern last week did indeed produce the anticipated correctional sequence. Unfortunately for the bulls, this attempt to bring better breadth to price synchronicity did so with a violation of the rising bottoms line from last July's price lows. Next week should provide enough evidence on how important this break of trend might be going forward.



Germany:

Like many of the other equity markets reviewed, the DAX cumulative A/D line also found too much overhead resistance to overcome last week and is starting to weaken enough where a high level price consolidation pattern can now be anticipated. We'll see how important this lack of bullish conviction might be next week as we get closer to testing the rising bottoms line shown in orange.




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