The SPDR Dow Jones Industrial Average (NYSE:DIA) finished last week lower by 0.58 cents to $101.58. The DIA started the early part of last week sharply lower until the major stock indexes staged a sharp reversal higher on Friday, August 27th. The late week rally was very strong and came after the Federal Reserve Bank (U.S. central bank) Chairman Ben Bernanke stated that the central bank is not out of bullets when it comes to the Fed propping up the economy. This usually means that they will continue to print more money and keep the liquidity flowing in the markets. The key Fed funds rate (overnight lending rate to large major banks) has been at zero-quarter percent since December 2008 helping the large major banks to make money without even lending a dollar. In all fairness, the major stock market indexes were very oversold on the daily charts and due for a bounce in the near term. Next week is the last trading week before the Labor Day holiday in the United States. Therefore, we expect light volume and lackluster trading throughout the week as many traders and investors start the holiday early.
 




The Semiconductors Holders Trust (NYSE:SMH) has a very bearish head and shoulders top pattern in place at this time on the weekly chart. This semiconductor sector usually leads most technology stocks higher or lower. While the weekly bearish pattern is in place, ensuring that price closes below the rising black neckline on the chart it is always prudent. This past week the price of the SMH closed basically on the line as shown below, and that does not offer clear confirmation of a close below which would trigger the bearish pattern. Therefore, it is still possible that the price of the SMH could recapture that trend-line and bounce higher. Should the bearish pattern play out on the weekly chart the downside target would be around $20.00 for the SMH. This coming  week is expected to be a light volume trading period due to the holiday in the U.S. Please remember that light volume will often favor the upside. Hence the old market adage, never short a dull market.




Randgold Resources Ltd. (NASDAQ:GOLD) traded higher again last week and remains in a technical weekly uptrend. The leading gold mining stock is now trading above its weekly 20, 50, and 200 moving averages. Gold and gold mining stocks will often trade higher on any suspicion that the Federal Reserve Bank will continue to print more money to keep the major stock market indexes inflated. Please remember that gold has been regarded as a true currency since biblical times. Therefore, when there are signs of more fiat money creation gold and gold mining stocks will usually trade higher. In the near term Randgold Resources Ltd. should have short term resistance around the $95.00 area. Should the stock close above that level then the psychological $100.00 resistance level would come into play. 


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