THE TECHNICAL INDICATORS HAVE BEEN MUCH MORE HELPFUL THAN LISTENING TO THE NEWS OR THE CONSENSUS OF INVESTMENT EXPERTS.

There has been no shortage of negative news, earnings shortfalls, and dire predictions during 2008. Yet the markets have made meaningful headway since the US markets bottomed on Mar. 17 and the S&P/TSX bottomed on Jan. 22. When facing a dilemma, following the consensus of experts such as medical specialists, engineers or mechanics is usually the best course of action to take. However, when it comes to investments, over and over again the consensus of experts is often dead wrong. Most analysts tend to be optimistic at market tops and pessimistic at market lows. It is no different this time either. As of last week there were still slightly more bears than bulls in the Advisory Sentiment survey, yet the SP 500 is up 113 points or 10.6% and the TSX is up 2,226 points or 18.5% and only 410 or 2.9% away from an all-time record high. Over a quarter century of experience as a professional in the investment industry has taught me that the best way to determine market prospects and make prudent, profitable decisions, is to follow reliable technical indicators, not news reports or the consensus of investment experts. In all my years of examining market indicators, I have found the oscillators and trend charts used in my updates to be the best in the world - bar none. That is why I produce them for you here.

The sharp market sell-off on Friday, Apr. 11 when GE missed its earnings forecast turned out to be a temporary "storm cloud" as forecasted in last week's update. While North America markets rose more than 4% last week, the long-term trend indicators for the US market averages have still not turned green, but are close to doing so. When that occurs, it will give the "all-clear" signal. The trend indicators for the Volatility Index and the TSX turned positive two weeks ago.

The indicators have also been very helpful for analyzing gold and silver. As the price of gold approached $1,000 an ounce on Mar. 10, the oscillators were suggesting that the risks of a decline for precious metals had increased just as gold was making front-page news. Gold promptly fell 10% right after closing above the $1,000 record high mark. While gold and silver seemed to be making a comeback with some major gains after correcting, the indicators were showing that this was just a short-term rise in a longer-term downtrend. Late last week the price of gold and silver fell as equity markets held on to solid gains. Please see the gold charts and comments below for the latest update.

In summary, the action of bonds, precious metals, and equities suggests that investor confidence and the appetite for risk have increased. All that needs to happen now is for the red and green trend charts to turn green (positive) for all the US market averages. The markets need to stay very close to current levels for a little longer, or rise a little more for this to happen. I will keep you posted.

Bonds - Bond prices fell (yields increased) as confidence in an economic recovery improved. Bonds are usually a poor investment at this stage of an economic slowdown.

Commodities - gold and silver seem to be in the final short-term declining stage. The charts for oil still look positive.

Currencies - the long-term oscillator for the CAD$ has bottomed and turned up, suggesting that the Loonie should now rise compared to the US$. The euro looks strong versus the USD$ and yen as the long-term oscillators are still rising. I will display euro charts again next week.

After a brief consolidation phase, the short-term oscillators for the market averages turned up last week suggesting that the markets should have another two-week spurt to the upside.

Last week the short-term oscillator for the US Financial Services Index and US Banking Index turned up from the oversold position. This is very significant, as this is where the problems are and the financials comprise the biggest sector in the SP 500 Index.

The long-term oscillators for the US market averages have not been this strong since the rise after the Aug. 16,  2007 low. This suggests that this rise is different than the rallies experienced since November 2007.

The fact that the long-term trend indicator for the Volatility Index has turned red (when the Volatility Index turns red it is positive for equities since volatility peaks at market lows) is giving a clear signal that the character of the market has changed for the positive for the first time since February 2007.

However, the trend charts for the US market averages (other than the DJT which has turned positive weeks ago) have not turned green (positive) yet. That could happen soon, which would give the all-clear signal.

The TSX turned green two weeks ago and is within a few percent of a new all time record high. This very clearly shows the relative strength of the TSX compared to other North American and global markets. I have been a strong advocate of investing primarily in Canada since May 2002.

After being in limbo, bond prices finally gave way as investors sold overvalued bonds to move into equities. It is not close to being oversold yet.

The short-term oscillators for gold and silver peaked last Thursday so the short-term rise in a longer-term downtrend seems to have ended. This means that there could be further declines/consolidation in the period ahead.

The long-term oscillators for gold and silver are declining and are getting close to the oversold level. When it turns back up again, that will suggest that the corrective phase is likely over.

The long-term trend chart for gold is still green (or positive) as it has been since July 2007. If it stays green throughout this corrective phase, it will indicate that this is only pause in a longer-term up trend.

The price of oil and the long-term oscillator continue to reach higher highs. Nothing negative so far.

The long term oscillator for the CAD$ has just turned up suggesting that the Loonie should rise again after being in a consolidation phase since last November after it hit $1.10 US. The Loonie usually follows the price of oil, so it is no surprise that the CAD$ should finally make some headway to the upside.

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