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WEEKLY CHARTS

DJIA: Weekly support at 11000 and 10890; resistance at 11280.

DJTI: Weekly support at 4425, 4250, and at 4000; resistance at 4575.

SP500: Weekly support at 1250; resistance at 1315.

NASDAQ: Weekly resistance at 2325 and 2350; support at 2250.

HUI: Weekly support at 275 and 250; resistance at 325.

OIL: Weekly resistance at $65.75 and at $70; support at $59.00.

The TOs are rising, which is supportive of higher prices. At the same time, notice that they are at the top of their range, suggesting that at least a short-term top is imminent.

The trend is UP for NASDAQ.

      
The trend is UP for the SP.

SUMMARY

Last week (3-10-06) we said, "The major indices remained stuck between resistance and support, while most of the technical indicators are either slightly negative or neutral. All in all, nothing really changed since last week. The equity markets remain hostage to the bond market, and unless we see a meaningful retreat in bond yields, the major indices do not have much room for maneuver. Of course, if the bond market behaved while oil prices remained below $65 per barrel, the bulls would be able to push the SP towards the 1325-1340 level. However, the key thing to remember is that the opposite could happen just as easily. One of the things that we have learned from studying the markets for nearly 20 years is this: there are times to be long, there are times to be short, and there are times to be mostly in cash. In our view, this is the time to be mostly in cash if you are a risk-averse investor. If you are a short-term trader, then pay attention to support/resistance. A close below support or above resistance will easily lead to an additional 2.5%-3% move in the same direction."

For the week of 3-20-06): Last week bond yields retreated and oil prices advanced only slightly, which gave the opportunity to the bulls to drive equity prices higher. For this week, the overall climate remains positive and it suggests that we can expect a push higher towards resistance (see table below), but that also ought to mark--at least--a short-term top. Please read also OPEX and Sentiment.

Last but not least, we would like to reiterate our belief that the real trading opportunity over the next 4-6 weeks will be in gold/gold stocks. Please revisit--in the archives--the reports on the XAU from the past couple of months.

Ike Iossif

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