Excellent note from David Rosenberg here:

The S&P 500 is clearly struggling and on Thursday closed below its 50-day moving average and is barely hanging on to its 200-day m.a. As we have said before, the bounce in the market was a two-month wonder that looks to have been completed in early May and what is ironic is that most of the street strategists turned outright bullish after the complete move had already been made. But the volume has not been there, the green shoots are fading (with both auto sales and employment disappointing in June) and it may be important from an “all the good news is priced in” standpoint that since the stress test results were announced the broad market has done little more than move sideways.

The CRB is also struggling now at both the 50-day and 200-day m.a.’s. The U.S. dollar has bounced back despite the weak economic data and the reason for that is because heightened risk aversion, which is what we are seeing now, tends to occur alongside a shift towards liquidity preference, and many investors may not like the greenback for a whole host of reasons, but liquid it is.

Note that the Baltic Dry Index is coming off a two day 2.2% slip, which could be a near-term caution sign for the commodity complex. The chart of gold shows a triple-top and it too is converging on the 50 and 100-day moving averages – the rebound in the U.S. dollar and news that jewellery demand out of India is very weak (see page 20 of today’s FT). This should help set up a return for the Canadian dollar into a 80-83 cent band (as an aside, the higher end represents the 200-day m.a.).

The 10-year T-note yield, after the latest rally, is at a critical juncture of its own at 3.5% – hugging the 50-day moving average and a break of that could well set up a retest of 3.08 – 3.15%, which is the range on the 100-day and 200-day moving averages. As an aside, the bubble of the year candidate may well go to the Chinese stock market, which has soared 70%. Nothing else comes close.

Source: Gluskin Sheff