XSO (ASX) The Brains Trust

Originally posted by paddington bear ↑

It is one of those mornings where every chart I have seems to be jostling for attention. So much bubbling away here. Usually that means something is going to happen so perhaps an even greater level of vigilance is required.

But the one chart that demanded the most attention was the US Dollar. Still locked in this sideways pattern of the past few months but it is slowly working it way towards the downtrend. However, this little bit of strength on the back of higher rates has caused havoc in many areas and in particular metals. Mind you silver was up there wanting to be noticed again. It touched its downtrend and really did a great job of trying to hold its gains while everything else was fading around it.

I have mentioned a few times recently that I am really concerned that the S&P could be forming an upslanting wedge – a particularly bearish pattern. It hasn’t broken down but it certainly was starting to look more and more like this is what it is building. And just to add to the woes – the Russell 2000 looks to have an even “nicer” upslanting wedge pattern as with the NYA. This is very worrying.

Crude oil has been very strong and it was higher again overnight before fading. However, I think it is the end of this move. I have often mentioned that natural gas has a really important bearing on the trend of crude and the natty gas market broke seriously to the downside in the latest session. May be just a correction in crude would be enough.

But then Australia. What a disappointing performance yesterday. Broke the lines that have been restricting gains recently but then couldn’t push on and came all the way back to sit on the very same blessed lines that had been causing so much trouble. Really infuriating.

But some good news in all these miserable points this morning. Iron ore was better but what is really interesting is that the distants were even stronger than the near months. Been a while since we have seen something like that. Obviously a firmer iron ore price is a distinct plus for our market but it would seem to have been thoroughly anticipated with our XMM index having been up for ten consecutive trading days. In fact it has carried the weight of the whole market recently - perhaps I should say again - but I think the sector has got a little over extended.

I’m starting to get really concerned that banks are beginning to weigh on more than market sentiment. I know I have been saying that if we look at our market without the leaders such as XMD, then our performance is comparable to the indices in the US but with banks now likely to be over reacting in the other direction to their recent behaviour, perhaps this is going to start to be a drag on our economy. Just one more thing we might have to think about. Almost unbelievable some of the evidence being given. If it wasn’t so sad, it would be laughable. But I have not once heard the word “commission”. Until the industry changes and income is not based on the commission written, attitudes will not change. Wouldn’t matter if every person that had a licence had a PHD – it is the method of income that is floored.

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Some cogent comment on the whole sorry mess here....

https://www.lfeconomics.com/analysis/great-australian-screw-job/