Bourses provided fireworks before going into the weekend on both Thursday and Friday. While volumes have been quite limited the declines on Wall Street were enough to have media pundits question the ‘well being’ of the bull rally that has been taking place since the beginning of the year. From a fundamental standpoint the sell off from the three major indexes on Thursday and Friday was explained away via negative sentiment coming from the U.S. bond market. The question going into this week is if Wall Street will continue its two-week slide or find a comfortable ground that will allow those on vacation the ability to rest easy.

Gold has climbed and finds itself near 1374.00 USD as of this writing. The precious metal has risen nearly 100.00 USD in the past week after bouncing off of support. However, like the equity markets all trading results must be taken with a dose of skepticism. While traders enjoy unencumbered terrain with large investment houses only occupied with skeleton crews, the question and fear is what becomes of the broad markets when the clock strikes September. Plenty of news events are permeating the airwaves but their impact on global sentiment remains miniscule. Egypt is experiencing widespread strife. Britain and Spain have entered a new ‘spat’ regarding Gibraltar. China and Japan are displaying their fangs at one another regarding territorial waters.

Forex remains opportunistic. The EUR has maintained its upper values against the Greenback, Sterling has climbed to stronger highs, and the AUD has followed suit putting in good results. This week will be extremely light with data with little in the way of fanfare until Wednesday when Existing Homes Sales numbers come from the States. Thursday will see Flash Manufacturing and Services PMI readings from Germany and France. Economic reports in essence will mirror much of the market which would prefer to remain in a summer slumber.

Traders who choose to work will find markets that appear range bound with sudden bursts of volatility when the odd large ‘order’ comes through the system. Risk management should be practiced and short-term inclinations should be weighed carefully against long-term notions.