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fib_1618

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...with all of their McClellan Summation Index' now above "escape velocity" levels (+592, +853, +996 respectively), we'll continue to give the benefit of any doubt to the bulls for the next couple of weeks with many historic records being broken in this same effort.

Though the markets took a bit of a tumble coming out of the gate on Monday, the major market averages ended a somewhat choppy 5 day period with a .34% average gain, week over week, with the Small Caps turning out to be the star of the show having lost 1.39% on Monday only to have the largest weekly gain when things settled on Friday at .87%. We also saw the Dow Industrials, S&P 100 (OEX), S&P 500 and Wilshire 5000 indices all closing at new all time price highs on Friday and thereby extending their weekly winning streak of positive closes from the mid October lows to seven in a row.

A quick review of this weeks breadth charts shows the the NYSE Composite, NYSE Common Only, NYSE Specialty CEF and NYSE Preferred advance/decline lines moved net sideways, while the NYSE Bond CEF and NYSE REIT advance/decline lines both moved to new all time highs on Thursday before giving some back with Friday's "better than expected" jobs report. There was also a sharp 2.22% rise in the yield on the 10 year note on Friday, but as long as the rising bottoms line in the NYSE Bond CEF advance/decline line is maintained, this will likely be looked back as a knee jerk reaction to a report that showed good seasonal hiring, but that these same job gains are not likely to be around after the holiday season comes to an end later this month. 

Looking across "the pond" and we continue to see money moving into both the DAX and FTSE advance/decline lines with the DAX now 9 net advancing issues away from seeing new all time cumulative highs while the FTSE is only 6 net advancing issues away from meeting this same goal. Speaking of historic levels, it should also be duly noted that the DAX price index itself closed at new all time highs on Friday capping off a run of 1515.17 points in 37 trading days or just under 18%! With the price of oil a very important component to Europe's health, as long as energy prices continue to collapse, the entire continent should get quite boost in helping it out of its current economic malaise.

With gold opening down some $25 last Sunday night, an early Monday morning reversal took placed that pushed prices up some $45 at the end of the trading session giving both sides of the trade a real run for their money. But as the week went along, money once again started to show a more defensive posture towards the precious metals stocks in general and we're now seeing both the Precious Metals and XAU advance/decline lines now leading prices to the downside. With the Aussie advance/decline line at 17 month lows and just 727 net declining issues from its all time lows, and Canada's TSX advance/decline line maintaining a bearish configuration with the TSX Ventures advance/decline line already at all time lows (see cumulative charts), a full defensive position toward the mining stocks is now warranted with gold's downside target of $1100 the overall objective.

So it was another "boring" week with a price advance that is giving traders a lot of reasons to be on both sides of the fence, but as long as current liquidity dynamics are maintained, we'll keep our ongoing blueprint of "short and shallow corrections with any surprises to be to the upside" until the market begins to tell us to the contrary.

Have a great trading week!

US Equity Markets:

[breadthspx120514]



[breadthdjia120514]


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US Interest Rates:

[breadthtnx120514]

US Real Estate:

[breadthreit120514]

Precious Metals:

[breadthpm120514]


[breadthxau120514]

Australia:

[breadthaus120514]

England:

[breadthftse120514]

Germany:

[breadthdax120514]

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