Equity markets across North America have opened higher this morning with the Dow Industrials (US30 CFD) rebounding from yesterday’s decline and following other U.S. indices higher. Currently the US30 is testing resistance at 12,350. On a breakout, it could advance to test 12,600, but should it falter, a retest of support closer to 12,100 could be possible. Meanwhile, the S&P/TSX Composite continues to test resistance at 15,000 with support still in place near 14,650.

Equity markets appear to be advancing despite continued evidence to suggest that the U.S. economy may have entered a period of stagflation. U.S. industrial production declined by 0.2% over month in May, below the 0.1% increase expected. U.S. producer prices increased 1.4% over month in May above the 1.0% increase expected. Meanwhile, in the UK CPI increased by 0.6% over month in May, which was higher than the 0.4% markets had been expecting.

Commodity prices, however, do appear to be reacting to the higher than expected inflation numbers, likely due to increased concerns that central banks may need to start increasing interest rates. In particular, note that after trading close to $140/bbl yesterday, crude oil has slumped back under $135/bbl but has been holding above the key $131.50/bbl level. Meanwhile, natural gas continued to hold near the key $13.00/mcf level that it broke through yesterday.

Upcoming educational webinars

In the coming months, Colin Cieszynski will be presenting a series of free webinars on trading for accredited investors from coast to coast. 

Date                Time                Topic                                      

July 22             7:30 pm ET      Developing a Trading Strategy 1:
                                                What Kind of Trader Are You?

For more information on these and additional CMC Markets seminars, please go to CMC Markets Seminar Registration Page at http://www.cmcmarkets.ca/en/content/education/free_seminars.do

This commentary is based upon technical analysis. Technical analysis is the study of price and volume and the interpretation of trading patterns associated with such studies in an attempt to project future price movements. Technical analysis does not consider any of the fundamentals of an underlying company, and as such is inherently uncertain and should not be the only factor considered by an investor in making an investment decision. 

This commentary is provided for informational and educational purposes only. Nothing contained in this commentary is intended as investment advice or a recommendation or solicitation to buy or sell. All opinions expressed are current as of the date of publication and subject to change without notice.

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