Testing the Trends

This week will be a major test for the long term trend for the Dow, S&P, and Nasdaq. There will be key economic data released this week, such as the core CPI and housing starts. Moreover, Bernanke will be addressing Congress on Wednesday, and he will most likely explain his interpretation of the latest inflation figures. As the Fed made clear that they will be more data driven, this week's hearing at Capitol Hill and data release will be pivotal to guage how the Fed may move in August. As for today's broad selling in PM, it confirmed short-term technical weakness. Silver has failed to break above both its resistance level of 11.8 and the 50-day MA for over two weeks. Assuming a mild correcting for PM is in progress, silver, as with gold, will probably slide back down to the 200-day MA. Hopefully this is when I will get back into PM. Note: Tomorrow, look out for earnings from Coca-Cola and Intel as the market will probably react sensitively to their releases.