The barrage of selling that whalloped the mining sector seemed to have finally abated here at week's end. No doubt some of this was tied to shorts covering some very profitable positions. Additionally the rebound in the S&P 500 took the sector higher with it. I would think that some value based buyers were also at work here.
Regardless, the index bounced at the very last level of chart support shown. Additionally, the spike low in today's session went right back to the former downtrending line noted that was breached back in early September, a breach that I might add took the index sharply higher.
Oftentimes one will see a market that has broken out to the upside, run back lower and retest the broken downtrend line, touch it, then bounce back off of it giving evidence that the sellers have met up with sufficient buying to stymie any further downward move. That can be the end of the selling. We will see if that is indeed the case next week.
To give the bulls some breathing room, I would like to see this index move back past the 457-460 level for a bare minimum. A stronger confirmation would be a move back above 475.
Word came late in the session today that some supposed progress was within reach of some sort of compromise to deal with the upcoming fiscal cliff issue here in the US. I am not so confident that anything that emerges will have the least bit of impact on the problem but then again investors were perhaps looking for some reason to book profits on winning short positions in the equity markets ahead of the weekend.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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