SYA Daily Report, page-3

Will missiles stop the rally?

Yes SYA remained flat to finish on 23.5c. Our volume today was on good, but less than last 2 days, just over 117m shares traded. Today's trading was usual to other Li stocks - sideways to slight decline, so good to not give up anything today.

ASX Li stocks was weak for another consecutive day. Yesterday we had a decline of 3%, Of 54 stocks that I track, average loss was another 2.5% today.

Overnight US Li stocks were in panic mode. Average loss was around 5%. Previous day the loss was 3.5% - so back to back 2 days of decent loss.

What next -

The US indices had another green day on the back of good PP data and clawed back its loss from previous day. SP 500 gained close to 1%. ASX was mostly down the whole day, though not much. Finally closed around 0.25% down. But like yesterday, again resource stocks were weak.
.
So SP 500 now is back to Friday's level. It did a higher high and higher low yesterday from Friday, reaching 4028 and finishing nearly at same point as Friday at 3991. It has now crossed 4000 on 3 consecutive days but has not been able to finish above 4000.

From a chart perspective, most indicators are still bullish and probability of testing 4100/4200 is still decent. Yesterday Dollar Index and Yields fell - bullish, but surprisingly Volatility Index VIX did not buy the green yesterday - it went up and now above 24, one key level which is not good. For the downside, SP 500 needs to hold 3900 and then 3800.

Markets may have been spooked today due to missile issue around Poland. Also market speculation is rife around one of the sectors (Li) which is seeing some weakness, similar to one few months back. These factors are not allowing stocks to move, infact they are on the downslide. Although indices are rising, the sentiment is not that bullish at this stage (though on sentiment indicator we are officially in greed category, does not look like watching all the trades). Looks like only a decisive move, either very big green or crossing 4200 will give punters confidence, else there is a fear of it coming back, and most are playing safe for time being (not buying, taking profits or cutting losses).

So what will happen tonight? US Futures nearly flat. Asian markets largely red but no major drops. Also some Fed talks tonight. Retail data and CPI for UK/Canada - not sure how much impact it will have. Also some earnings report. At a very crucial juncture markets have suddenly become very indecisive and unpredictable. Most resource punters are not buying it, for now. But that could change if we continue our march towards 4100/4200 on SP 500. Will that happen? Lets hope so. All the best.