XSO (ASX) The Brains Trust

Originally posted by paddington bear ↑

Another day of falls on Wall Street. However, we are assured from the highest levels that this is nothing more than a “slight glitch”!!!

But seriously, at this stage the S&P is still trading above the levels we got to on Christmas Eve. While Wall Street can continue to do that, I think there might be a reasonable possibility that we can rally and correct for some time before the next stage of the bear market gets underway. In fact, I wouldn’t mind seeing the S&P back around that target I had of 2400 again just to test the market support. I mentioned months ago that I expected volatility right through into the New Year but good heavens, this is starting to border on ridiculous. Just don’t forget that my next target on the downside is 2160.

Currencies were probably the main focus overnight. I hate this sort of volatility in currencies – it has a nasty habit over the years of causing problems in world stock markets. The yen was higher but came of that lofty level while the poor little Aussie which was literally bashed yesterday, has recovered most of that sharp fall. US dollar was lower but recorded an inside day – all trading within the range of the previous day but if it breaks down, then it will probably be time to go and hide.

The effect on commodities was mixed. We saw the gold price continue to climb the upper line of the upslanting pattern I have been watching all week but copper was dreadful again – you know how I worry when copper is such a focus. But grains improved. Is there something happening on that front? At the same time, crude is very close to breaking its dreadful downtrend. It has fallen from over 75 to a low around 42 since the beginning of October. A break of this downtrend would be encouraging. So much to try and get our head around at the moment.

Brazil another new all time high. Actually, it has run off the top of my chart!

The XJO did a really good job of showing relative strength again yesterday and as I have mentioned previously, I must respect that fact. Bit easier to make a better story on our market than the US at the moment but I do realise that if the US breaks down then we are going to follow. XGD (Gold Index) finally met my target of 5600 that I gave some time ago. As I have mentioned before, the gold sector is getting a bit overbought but as we know, markets can stay overbought. Just suggesting a bit of care here. However, I am pleased to see so many of the little mining stocks starting to make some progress and break some horrid downtrends. I have maintained for some time that there were signs that many of these little overlooked/unloved stocks were forming reversal patterns. However, beware of spikes. This market is still a cruel place for unsuspecting traders.

And just one point I made yesterday – I always like to be around the first week of a new year because so many times we see these “sneaky” movements that set the tone for later in the year.

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@paddington bear Seasons greetings & HNY; Interesting market swe face indeed!

re Gold; You said; "We saw the gold price continue to climb the upper line of the upslanting pattern I have been watching all week ..."
I have been tracking that pattern & thinking it was one of your rising wedges (hourly) ..... it broke north of my upper line (unusaual) and found myself moving the line based on a 4 hourly .... now if there is one danger sign in this game IMO its when you move lines to "fit your story". The lines should tell the story NOT other way around.

& of course the damn ting has retreated off my new upper in last cuppla hours which could be a confirmation????

How are you reading it?