Weekly Analysis April 18 to Friday April 22 2011 by SolidityBrokers.com

U.S. stock indexes have largely been treading water, as Wall Street preps for an onslaught of earnings that will have more than 100 S&P 500 companies reporting in the week ahead. Next week everyone will be focused on earnings as most of the S&P 500 will be reporting. Some companies to watch are Apple, Johnson & Johnson, Wells Fargo and Intel. The U.S. stock market will be closed on Friday for the Good Friday holiday.

In the last week or so you’ve seen some strategists revising down GDP estimates for the year, and the IMF did the same thing for the entire world and the U.S. with the Federal Reserve’s policy of quantitative easing liking coming to an end at the end of June, so long as core inflation is viewed as under control, investors are trying to gauge the impact. When the Fed takes a little capital away from the party, investors are wondering just how the economy is going to do on its own as some of the stimulus is taken away.

The gold market experienced a bumpy roller coaster ride during the week. An interesting thing to observe was the reasons that economic commentators gave for price fluctuations. The short-term signs appear bullish for precious metals market. This sentiment is supported in several key charts. It is difficult not to be excited about the outlook for gold and silver today; its performance in recent months certainly has not been a fluke and it appears that further price increases are likely for both precious metals.

This Week’s Financial Main Events

Monday, April 18

US Economics
NAHB Housing Market Index

Global Economic Data
China Property Price
Euro-Zone Consumer Confidence

Tuesday, April 19

US Economics
Housing Starts
Building Permits

Global Economic Data

Australia Reserve Bank 
Japan Consumer Confidence
Japan Machine Tool Orders 
German Purchasing Manager Index
Canada CPI
Canada Leading Indicators
Canada Housing Starts

Wednesday, April 20

US Economics 
MBA Mortgage Purchase Index
Existing Home Sales 
Crude Oil Inventories 

Global Economic Data

Australia Producers Price Index
New Zealand Credit Card Spending 
German Producers Prices
Bank of England Minutes

Thursday, April 21

US Economics
Initial Claims
Continuing Claims 

Global Economic Data

Swiss Real Estate Index
German IFO Business Climate
Britain Retail Sales
Canada Retail Sales

Friday, April 22

U.S. Markets Closed


Last Friday, we indentified an unmistakable divergence in the 4-hour USD/CAD chart. It seems the downtrend is just emerging, which means last week’s technical correction is over. The Loonie should head back lower through the 0.9524 level, its 2011 low and then towards the 0.9500 level, its psychological level. On the upside, USDCAD will have to close above the 0.9664 levels to reduce its broader downside vulnerability and bring further recovery towards the 0.9731 level.  That being said, traders would be wise to enter the market with short positions featuring “adventurous” take-profit levels.

Stop Loss: 0.9661

Take Profit: 0.9500





Price hesitation saw the pair closing lower the past week, but it continues to hold on to its long term uptrend. As long as it continues to maintain within its established rising channel, we look for the pair to strengthen further towards the 1.4576 level, its Jan 2010 high. Its 4-Hour Commodity Channel Index remains bullish and pointing higher supporting this view.  Alternatively, support starts at the 1.4329 level, its channel support followed by the 1.4266 levels. We expect the latter zone to reverse roles as support if tested and then turn the pair higher.  We recommend buying the EUR/USD.

Stop Loss: 1.4348

Take Profit: 1.4512




Natural Gas

Last week saw natural gas prices climb to a one-week high on Thursday after government data showed that U.S. natural gas inventories rose less-than-expected in the preceding week. On the New York Mercantile Exchange, natural gas futures traded at $4.213 by close of trade on Friday. Prices jumped 4.4% over the week amid speculation the 2011 Atlantic hurricane season was to produce above-average activity after a closely watched forecast.  The study included a 47% chance of a major hurricane making landfall along the Gulf Coast, a major oil and natural gas producing region. Since the hurricane season is still months away, short selling natural gas could turn very profitable in the short run.

Stop Loss: 4.5600

Take Profit: 4.000



Published by www.SolidityBrokers.com