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Saturday Morning Joe, 12 August, 2017

August 12, 2017

In Australia yesterday:

XJO down -1.18%.

Screen Shot 2017-08-12 at 8.09.20 AM.png

The Index remains above horizontal support and the 200-Day MA, but the recent trend of higher lows has been broken.  Friday’s drop of -1.18% sounds bad but such drops have not been uncommon since this sideways meander began.  6/6/17 -1.52%, 15/6/17 -1.21%,  21/6/17 -1.59%, 30/6/17 -1.66%, 7/7/17 -0.96%, 12/7/17 -0.96%, 18/7/17 -1.18%, 28/7/17 -1.42%.

In U.S.

Most major indices recovered a little ground but not enough to say the bearish trend is over.   Stochastic RSI is in bearish territory for all five indices.  Four out of five indices finished below the 50-Day Moving Average.  Dow Jones remains marginally above its 20-Day MA.

Screen Shot 2017-08-12 at 8.29.53 AM.png

DJ +0.07%, SP500 +0.13%, Nasdaq +0.64%, NYA -0.07%, Russell2000 +0.12%.

Financials -0.4%.


Screen Shot 2017-08-12 at 8.52.09 AM.png

SPX up a little +0.13%. The bear trend remains intact, but yesterday’s low wasn’t broken. That is occurring at horizontal support.  So it is possible that this downtrend is over.  A break below horizontal support would be very bearish.


DBC +0.34%. Energy +0.5% Industrial Metals -0.06%. Copper Producers ETF was down -2.02%. Gold +0.47%.  Iron Ore +1.6%

You may remember recently I was saying that the correlation between the Australian market and the U.S. market was insignificant.  That has now changed.  The correlation is weak but significant.  So we can expect to see some flow-on effects from overnight markets into the Australian market.  The small gains in America should, by that reasoning, result in a narrow range day here in Australia on Monday.

Geo-politics continue to be the dominant factor.  We have two ‘crazies’ on either side of the Pacific making out-landish statements of intent – cooler heads in America seem to put some restraint on the actions of their leader.

Until the rhetoric cools down, the market will remain jittery.


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