SP500 + 0.17%, Dow 30 +0.38%, Nasdaq100 – 0.17%, Russell2000 -0.11%, Transports +0.94%. Most indices were in narrow ranges and showed some selling pressure during the session. Volume was at the low end of the recent range.
SP500 looks ready for a pull-back or consolidation. Any pull-back is likely to be minor back to the congestion zone of December/January. The next session in New York will be influenced by the Jobs Report (Non-Farm Payrolls). Recently, the Jobs Report, whether positive or negative, has been greeted positively by the market.
BHP on the NYSE +0.87%. EWA +1.23%. Ozzie Dollar +1.05%.
Copper ETF +1.78%, Steel ETF +1.06%, Coal ETF +2.3%, Light Crude Oil ETF +0.91%, Gold in US$ +0.99%. Those figures are supportive of our Materials Sector today.
XJO -0.0%. I used a cricket analogy this morning. Boring. It applies to today. It’s like waiting for the Fireworks on New Year’s Eve – we know it’s going to happen. But with the stock market, the time is not pre-set.
Chart for the XJO today:
All those divergence arrows on indicators look threatening – but not necessarily.
Here’s the Sector Performance chart for today.
A bit of buying came into the market after the release of good economic data in Australia – but it really didn’t amount to much. Australian news rarely has much effect on the stock indices. The media makes it seem important – but it rarely has much lasting effect on the markets. It’s just noise. If Ozzie news means much, we should have seen the Consumer Discretionary lurch higher today. XDJ up today +0.1%. It did seem to get a bit of a go after 11 o’clock – but then it gave up a lot in the afternoon ssession. Really – a non-event.
Markets are still looking to the Jobs Report on Friday. That often has a market moving effect.
Just now – the Ozzie market is on auto-pilot.
Is the Ukraine issue finished? Maybe.
And the crowd on the Hill chanted, “Boring, Boring, Boring. Ave a go ya mug.’ No – I’m not talking about the South African defence at the Cricket Test – but last night’s session in the NYSE.
SP500 -0.01%, Dow 30 -22%, Nasdaq100 +0.2%, Russell2000 -0.23%, Transports +0.32%. The range on the SP500 was about as narrow as it can get with volume down at the low end of recent sessions.
RSI crept back over the overbought marker at 70 where it was a couple of days ago. MACD Histogram tells us that momentum has eased compared to a couple of weeks ago. CCI at 192.8 is close to the danger level of +200. Money Flow says the recent run-up had reached manic proportions. All of that could mean a pull-back is coming – or just some sideways action like we saw in mid-November to early-December. But, from where I’m sitting on the Hill, it’s hard to see that this can go much higher.
BHP on the NYSE +0.16%. EWA +0.36%. Ozzie Dollar +0.39%.
Copper ETF +4.07%. (This ETF is notoriously volatile, daily swings of +/- 5% are not uncommon. The trend is what is important. At this stage it’s in a steady sideways trend for around 9 months. That’s a long time. If this breaks upwards, we could be seeing a sustained bull market in some of the Miners.) Steel ETF -0.11%. Coal ETF -0.16%. Light Crude Oil ETF -2.21%. US$ Gold +0.16%.
It’s not often we see so many negative technicals all at once. At resistance, at a measured move, recently overbought and now neg divergences setting up. Abandoned Baby candle three days ago. Long upper tails the past two days suggest selling pressure. Still … the trend hasn’t broken to the downside. This could turn into an avalanche. But – that’s just speculation until we see a decisive change in the trend.
We’re back to resistance. XJO up +0.9%. How many times has the index been cracking it’s head against this level. I suppose one day it will fall. Now? Who knows? Volume was well above average on a big up day. There would have been some serious selling going on by some sharp people. But maybe they’re selling out early.
We’re now looking at a couple of quiet days ahead. The market hoas now discounted that Ukraine thingie. Next it will focus on the Jobs Report out on Friday in America.
It looks like the Consumer Discretionary got a bit of a lift up after the Ozzie figues on GDP and household spending came out today came out today. Here’s the Sector performance chart for today:
Gold Miners took a little hit – but not enough to make it stagger. Property was down a bit – it’s been weak for nearly a year. Telecoms were off a little. No comment on that. Probably just noise.
Most gains were fairly distributed across Sectors.
This Ukraine non-event reminds me of something out of an English comedy (with apologies to Monty Python).
Lord Obama: You don’t frighten me, Big Russian Bear. Go and boil your bottom, you son of a silly person. I blow my nose at you, so-called “Russian Tsar,” you and all your silly Russian Sol-di-ers. If you don’t nick off …… I’ll, well, I’ll, I’ll smite thee with a feather.
Tsar Putin. Oh OK. Alright then. I’m going home. You big bully. pfftthpth.
SP500 +1.53%, Dow 30 +1.41%, Nasdaq100 +1.41%, Russell2000 +2.75%, Transports +2.23%. SPX and R2K at all time highs. “All’s right with the world.”
If we use a two-day chart for the SP500 instead of the regular daily chart, it’s as if Monday never happened. The break above resistance is intact. The current candle shows buying pressure (long lower tail). That suggests further upside.
Technically, the picture remains dangerous for the SPX. Possible divergences are setting up on MACD, CCI and Money Flow. CCI is mildly overbought – so it could go much higher. RSI is nudging at the 70 level – that’s a more serious consideration than the CCI. This now has the potential for a “blow-off” top.
Ukraine looked likely to be a devastating tornado – it did, however, turn out to be a storm in a tea-cup.
BHP in NY +0.85%. EWA +1.45%, Ozzie Dollar +0.18%. DB Commodities ETF -0.38%, US%Gold -1.24%. The Ozzie Gold Miners tanked on Tuesday pre-empting the fall after our market closed.
I mentioned yesterday that action in Gold looked like an exhaustion gap. Well that candle has now turned into a bearish “abandoned baby”. (It doesn’t strictly conform to the text-book definition, but it looks good enough to me.) A bearish abandoned baby is a highly reliable reversal pattern. We’ll see.
Some fear went out of the market today, XJO up +0.3%. Volume was moderately down on the 20-Day Average. RGB one of the Australian Bond ETFs was up +1.4%. It’s thinly traded so not always a reliable guide. Gold Miners, although US$ Gold was up big time last night, fell -2.1% after being well up early in trade.
The market still looks indecisive, but the turn around in the Gold Miners suggests the fear of the Ukraine crisis is dissipating. US$ Gold last night also hit a major technical resistance level – so punters might be expecting US$ Gold to fall from here. That would impact our Gold Miners.
Here’s the XJO Chart:
The chart looks indecisive. Today’s action was an inside day now locked between the 5-Day and the 20-Day MA. Indicators still could move down a far way.
Breadth today was not supportive of the bulls. TRIN which is a relative measure of volume going into Advances and Declines came in at a bearish 1.26. (Above 1 is bearish. Below 1 is bullish.)
So I wouldn’t discount further falls.
SP500 -0.74%, Dow 30 -0.94%, Nasdaq100 -0.74%, Russell2000 -0.56%, Transports -0.62%. Compared to Europe, the falls in America were remarkably restrained. German DAX -3.44%, French CAC -2.66%, London FTSE -1.49%. The falls seem to be inversely related to a particular country’s distance from Russia. Perhaps the Germans have most to lose if the Ukraine crisis takes a turn for the worse.
Here’s the SP500 chart:
The recent move above resistance now looks like a false break. When a market is overbought and it then breaks above resistance, we often find that that move is a false break. Indicators are suggesting that there’s more downside to come. But, at this stage, the American market reaction to the Ukraine crisis has been remarkably restrained. That could change as events unfold.
It should be noted, as far as I can gather from news sources, despite the incursion of the Russians into Ukrainian territory, no shots have been fired by either side. Are they waiting for one or the other to blink? It looks likely that Putin is playing a very clever game of brinkmanship. But this is Black Swan territory. Unpredictable.
Here’s the German DAX chart:
The German market suffered a bad case of soiled underpants. The DAX is looking sad. A double top, and a cross by the MACD Histogram below zero suggests much more downside. Today’s big down candle with a volume surge, and CCI extremely oversold, suggest that we’ll see some consolidation or perhaps even some upside in the next couple of days. But a lot of technical damage has been done. The chart is now at a minor support level. That also suggests we’ll see a slowing of the downside move, or maybe a little upside. But I don’t think this cycle is finished yet. I’m expecting more downside.
BHP in NY -1.31%. (Remember that BHP went ex-dividend in Australia yesterday. So that fall in NY doesn’t look too bad.) EWA -0.76%. Ozzie Dollar flat +0.09%.
DB Commodities Tracking ETF +1.38%. Commodities often get a boost in times of international tension. US$ Gold +2.09%.
Here’s the GLD chart:
The Measured Move Target from the Inverse Head/n/Shoulders has now been reached. Potential divergences are setting up on indicators. Today’s gap up looks likely to be an exhaustion gap. Technically this looks like the End Game for Gold. International events, however, may drive this higher. While the trend remains up, you have to stick to the trend. But the further this goes, the bigger the eventual retreat.