TSX Venture Exchange and Gold
The Venture’s 8-week winning streak was snapped but barely as the Index shed just three-quarters of a point to close an Easter-shortened trading week at 580. The Venture outperformed Gold and the broad commodity complex, however, and is on pace to post its best March since 2009.
As we see it, there are two possible near-term scenarios for the Venture: 1) a breakout above 591 Fib. resistance; or 2) a consolidation that further solidifies support in the 550’s. The Index climbed as high as 586 intra-day last Tuesday before a strengthening U.S. dollar, propelled by surprisingly hawkish comments from a few Fed officials, caused Gold, Oil and other commodities to reverse lower. The dollar, however, is far from being “back in the driver’s seat” (CNBC headline) as this is merely a rally out of temporarily oversold conditions. The Dollar Index closed at 96.17 Thursday and can be expected to encounter very stiff resistance just above 97. The downtrend started at the early December high of 100.60 and has further to go according to John’s latest charts. Traders will be closely monitoring a speech Tuesday by Fed chair Janet Yellen at the Economic Club of New York, and this will be followed a few days later by Friday’s all-important jobs report for March.
A powerful argument can be made that what we’ve seen in the Venture since late January is in fact the first wave in a new bull cycle (most investors don’t usually accept or recognize the start of a new bull or bear market until well after it has started). It’s reasonable to expect a modest pullback in the not-too-distant future after a 26% advance from the 466 all-time low of January 20, but any weakness would be an accumulation opportunity for the next wave up. There has been a dramatic improvement in the technical health of this market as John’s latest charts have shown, supporting the thesis that a long-term bear cycle has finally run its course.
In today’s Week In Review And A Look Ahead…
1. Latest Venture chart shows steady buy pressure entering the final 4 trading days of the month – key levels to watch…
2. Dollar Index – another bounce off support in various indicators will run into a wall of resistance…
3. Fresh test of Gold’s support band in progress…
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