The Brains Trust, page-12758

The strength in banks in the US was very short lived and overnight they have led Wall Street lower – so obviously this is quite negative. S&P has broken the very sharp uptrend that was worrying me earlier in the week. Russell 2000 is the only major index this morning that looks like it is trying to keep the dream alive. But even though the RUT has done such a good job over the past year of dragging Wall Street higher, I do not think it will be able to do it on its own. Looking at the Nasdaq Comp, it cannot afford to come off here at all – it is caught in a tight corner. Any break would be serious. Not only that I noticed that one of my all time best contrary indictors has changed his mind and is now calling Wall Street higher so on his past performance, I think we can probably forget that idea! Oh yes, I know, maybe this is the time he will be right but…..

I have mentioned previously that my ten-year yield chart looks like it is going to go down – that is interest rates to fall. This is the opposite idea to what everyone is suggesting at the moment. However, we must try to follow what the market is calling – not commentators. But then of course, the question is – could we call chartists commentators?

US dollar tried to rally again but finished well off its high in a pattern that is increasingly looking like a top. However, commodities still weren’t spared with lots of red ink across the page. Precious metals particularly hard hit but once more they have bounced back. Huge volume again across the section as the last of the bulls are dumped. I like this sort of market as it does suggest that if we have not seen the low, we are damned close. As well looking at my very long term, semi-log chart we have not broken the major uptrend.

Sharp fall in Thermal Coal. This is now the second of these little attacks in the past few weeks – prices were sharply weaker right out into the distants again. Don’t like this sort of behaviour.

Nothing much to help our market again today. We did try hard yesterday but we were still unable to break free. At the moment we continue to be buffeted from both sides – the New York market and Asian markets.