Dow Jones -0.32%, SP500 -0.51%, Nasdaq -0.62%, NY Composite -0.42%, Russell 2000 –0.84%. Afternoon buying saved a complete rout. (See the long tails on most of the candles.)
NYSE NewHigh/NewLow Ratio remains bullish at 90.2%. New Lows remain benign at 11. Nasdaq is less healthy at 59.6% but still above its mid-line.
SP500 bounced off the Super Trend Line. This pull-back could be over. DPO remains above zero. MFI remains above its mid-line. If we get an up day on Monday – then the buy-the-dippers will have renewed strength. That may be a false hope. Monday returns are lower after a losing Friday about 80% of the time.
US$ down heavily -0.7%. That had a positive influence on commodities, especially Gold which is very sensitive to changes in the US$. GLD up +1.95%. May is a seasonally favourable month for Gold, so Gold may be looking at further upside. DBC +0.97%. Base Metals +1.61%. Energy +0.26%. Ozzie Dollar down -0.24%.
In NY, Rio was up +0.84%. BHP up +0.8%. EWA (ETF for Oz shares in NY) up 0.3%. Westpac +1.03%.
XJO was up +0.51% yesterday in Australia.
Dow Jones -1.17%, SP500 -0.92%, Nasdaq -1.19%, NY Composite -0.86%, Russell 2000 –1.19%.
NYSE NewHigh/NewLow Ratio remains bullish at 92.4%. New Lows remain benign at 10. Nasdaq was 77.4%.
SP500 was down strongly, but not a lot of technical damage done. The Index is sitting on the 20-Day MA. That might provide support. Below that is major support from the Super Trend Line and the 50-Day MA. The negative divergences are beginning to play out. A break by the DPO and CCI below their zero lines might cause a bigger pull-back. Just something to watch.
US$ down heavily -0.82%. That had a positive influence on commodities, especially Gold which is very sensitive to changes in the US$. GLD up +1.89%. DBC +0.56%. Base Metals +0.57%. Energy +0.34%. Iron Ore recovered a lot of the previous session’s big fall, up +4%. Ozzie Dollar up +0.23%.
In NY, Rio was up +1.52% in NY. BHP up +0.55%. EWA (ETF for Oz shares in NY) up 0.3%. Westpac was down heavily in NY -1.52%, after being down -0.87% in Australia yesterday.
XJO was up +0.73% yesterday in Australia. We’ll probably lose that today.Low of yesterday was 5188. If things go belly-up, we have major support around 5151.
XJO up strongly today +0.73% on light volume. STW (ETF for the XJO) was up +0.67%. After the initial higher opening, the Stock trading in a narrow, choppy range.
Today’s candle is well within the range of the previous wide-range day.
Wednesday’s STW was down -0.51%, so today we recovered all of that plus a little bit.
The chart is poised precariously at the level of the first, minor horizontal support level of 49.35. STW closed today at 49.36.
Weak indicators suggest we’ll see a pull-back, which will probably be bought. We have a major horizontal support level near-by and just below that is the 200-Day MA. The 20-Day and 50-Day MAs are both rising which gives further clues suggesting that nearby support will hold.
XXJ (Financials X-Property) was an important catalyst for lower prices on Wednesday, down -1.53%. It didn’t do much to rehabilitate itself today, down just a smidgin on a relatively strong day. Unless XXJ can fire, there’s not a lot of hope for our market.
The best performers today were the export-oriented cyclicals, Materials +2.7% and Energy +1.8%. Consumer Staples surprised on the upside, also up +1.8%, largely due to a big move in Woolworths +3.62%. I can’t see any news related to Woolworths today, so somebody with deep pockets must be taking a shine to Woolies. That follows a huge move in WOW of +4.58% on 14 April, two weeks ago. Woolies remains in a long-term down trend and will need to see more days like these if it is to pull out of that down trend.
Overseas markets are looking shaky at this stage in the evening, with the big European markets currently all down more than -1%.
Japan took a big hit today (-3.61%) as a result of BOJ announcements. That’s put the willeys into markets tonight.
Dow Jones +0.28%, SP500 +0.16%, Nasdaq -0.51%, NY Composite +0.47%, Russell 2000 -+0.3%. Indices were flat or lower when the Fed’s announcement on interest rates came out at 2.00 p.m. (NY time). The market responded in a mildly positive fashion to the announcement. Nasdaq had been down about -1% earlier in the day and recovered some of that ground. (NH/NL in the Nasdaq, however, was positive.)
NYSE NewHigh/NewLow Ratio remains bullish at 96.2%. New Lows are virtually non-existent at five, New Highs improved to rise to 125. Nasdaq was a bullish 80.2%.
SP500 was up a smidgin, but the buying that came in after 2.00 p.m. can be seen in the relatively long lower tail. Indicators continue to show negative divergences. That can happen in sideways consolidations. For the past five days, SP500 has been held in a tight band by upper and lower Support/Resistance. A break out of that narrow band should result in a significant move. The 50-Day MA has crossed above the 200-Day MA, so the 50-DMA will probably hold any serious pull-back.
US$ -0.12%. The US$ fell after the Fed announcement. DBC +0.91%. Base Metals -0.18% but shows strong intra-day buying.. Energy +2.27%. Gold +0.29 Ozzie Dollar -1.81%. It recovered a lot of ground after the Fed announcement. It was down about -3% at one stage. Iron Ore crashed -5.6%.
Despite the fall in IO, Rio was up +0.52% in NY. BHP was down moderately -0.42%.
I think our market today will get a boost from the afternoon gains in New York and peg back at least some of yesterday’s losses. But, you never know what will happen intra-day, as we saw yesterday.
What a day. XJO way up positive at around 12.30, and then the inflation figures came in (actually deflation) and the XJO finished down -0.6%. What a difference the news can make.
Here’s the STW Chart (ETF for the XJO):
A pull-back was expected from overbought conditions.
At this stage, I think we can say we’re in a buy-the-dips environment.
The banks were hard hit by today’s deflation numbers. Here’s the chart for XXJ (Financials X-Property):
XXJ remains below the 200-Day MA. So it is not a very strong sector.
The past four days shows a classic four-day candle reversal pattern. So there’s probably more down side to come.
The relationship of the short term stochastic to the long term stochastic suggests we’re in a buy-the-dips environment. Just don’t expect a lot of upside while we remain below the 200-Day MA.
Financials remain the key to any strength in our market. Given that they amount to almost half of our market, it is worth keeping an eye on how they progress.
Bonds were the chief beneficiary of today’s deflationary figures. IAF, for example, finished up 0.43% while the XJO was down -0.063%. XXJ was down -1.53%.
It pays to be diversified.
XJO down today about -0.3%. That continued the gentle slide-down we saw last Friday. This pull-back is not looking dramatic at this stage.
Following is the STW Chart (ETF for XJO):
Negative divergences on DPO and MFI suggest we’ll see more down-side. The relationship between the short term stochastic and the long term stochastic suggest that this pull-back will be bought.
The weakest sector today was Materials -2.1%. Next worst was Energy -1%. If you remember from my Weekly Report on Sunday, these were the best two performers last week. So we’re seeing the usual reaction in these two against out-performance. The question now is: Will this pull-back result in a reversion to the long-term down-trend?
Here’s the chart for Energy (XEJ):
Last Thursday’s big up day took the index right up to the 200-Day MA. Friday and today have seen small drops from that important marker.
So – the current two-day pull-back is not unexpected.
Some indices were also overbought – so, again, some pull-back is not unexpected.
The relationship between the short term stochastic and the long term stochastic suggests that a pull-back will likely be bought. The long term stochastic is still rising so that suggests that the uptrend is intact. So any short-term pull-back is likely to be bought.
That’s a positive for the broad market.
Dow Jones -0.15%, SP500 -0.18%, Nasdaq -0.21%, NY Composite -0.43%, Russell 2000 -0.75%. DJ and SPX were flat after suffering early losses.. The broad market averages (NYS and RUT) were much more pessimistic.
NYSE NewHigh/NewLow Ratio remains bullish at 90.1%. New Lows are virtually non-existent at four, but New Highs are dropping rapidly, now at 37. It’s only a few days ago that they were above 200.
Indices have turned down. Clear negative divergences exist on the trend indicator (DPO) and MFI, so there’s probably more in this. The 50-Day MA has crossed above the 200-Day MA, so the 50-DMA will probably hold any serious pull-back. The last two days show intra-day buying, so the bulls are not giving in. A big up day and the all-time highs could be under threat.
US$ -0.32%. The negative reading on the US$ benefitted GLD (+0.29%) but that’s a relatively muted effort given the size of the fall in the US$. GLD also shows signs of intra-day selling. DBC flat -0.07%. Base Metals -1.07% – that’s a disappointing result given the fall in the US$. Energy -1.23%. Ozzie Dollar flat -0.04%. Iron Ore down -0.8%.
I can’t see much in that for Australia today.