I had planned to be away from my office for the whole of October. However, I was unfortunate enough to have been a client of the old ANZ/Etrade system and am now left with a complete debacle to sort out. Therefore, I have decided that I will take my leave from writing these notes till I get back at the end of October. I just have to take the time over the next couple of days to try and get some sort of order across what I try to do each day with all the changes I am having to make.
But what a time to be away from my office.
Starting this morning with the XJO – if it falls out the bottom of this sideways movement, I think it will go down to 5950 – and quickly. XMD – which has done such a good job of holding our market together, also looks like it wants to drop out the bottom of this pattern. Still have hope for the miners but I must admit that with all the drama yesterday, I have not had the opportunity to plough through them all but I did see a bit more buying in the few that I have had time to look at. Still think the opportunities might come in gold even though it hasn’t taken advantage of overnight trading. Just remember that the background is getting towards perfect here when the Commercials are net long. As I keep saying – I know it is getting towards boring – but the last time they were in this position was in 2001 and that was before the price went from around $260 to around $1920. Hence you can understand why, when I have been such a follower of gold for so many years, this situation does look exciting just as that one was.
And then there is Wall Street. I mentioned last week that I felt that we were seeing a top in the US – the only question being how long it would take to complete. These things can be very frustrating when watching on a daily basis. But I must say after last night’s dreadful performance, the odds of the SPX forming a top have grown quite markedly. I have mentioned a few times lately how the number of new highs and new lows was firmly in favour of the lows. There could be a question about the veracity of taking these figures as an indicator, but I don’t think last nights figures could be seen as anything but negative. And then – the actual level of money going into rising and falling stocks – well that was clearly very negative. Looking at the top volumes on the NYSE – they were all falls except GDX and ABX (Barrick which is involved in M&A action overnight). The banks were dreadful after last week trying to do a catch up. I think it is just tech left now – it was better overnight but I question whether it could continue if the SPX rolls over.
The US dollar – little changed but for today’s entertainment, the currency traders who had whacked the pound on Friday, bought it today but decided to sell a few Swissies and Kiwi dollars and our dollar to a lesser extent. This lot don’t seem to be able to keep an idea in their brains for more than 24 hours. Look like a mob of sheep following each other around the currency pits. Copper couldn’t hang on to all of the previous day’s sharp rise but still a reasonable performance. But the star of the commodity show today was the whole crude complex. All sharply higher. So…..looks like a bit more excitement coming our way! Has helped XLE (the energy ETF on Wall Street) mark up a hefty rise.
So back at the end of October. History does suggest that it is a month that can encompass quite a bit of excitement – those of us who have been around for a while might well remember getting up one October morning in 1987 and finding that New York had collapsed …….
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