Comment: Another strong day on high volume. The chart is now at significant resistance. The relative weakness in the Russell200 and NDX100 suggests a weakening in the background of the market structure. A lot of traders would have taken short positions towards the end of the day's trading. I think they're probably right this time.
NewHighs/NewLows came in at 158/20. That?s a positive result in line with today's up move. The Materials Sector +1.21% and Energy Sector +1.97%. That's positive for the Australian market today. All nine S&P Sectors were down, Financials, which has generally underperformed in recent months, was again the best performer, 2.4%. Technology was the weakest, +0.46%. (Once again we're seeing this lopsided structure to the market.) The Banking Sector was up strongly, +2.32%. Semi-conductors had a moderate pull-back after the previous day?s outstanding effort, +0.95%.
Europe: France +1.66% Germany +0.95% London +0.79%
Gold in U.S. Dollars is down -0.56%. Gold in Oz Dollars is down -1.17%. AUD/USD, up 0.86% to finish at 108.4. EWA (the ETF for Australian shares) was up +1.65%.
Technical Comment on the DJ Industrial Average: The DJIA finished at 12724.4. At resistance. Above the 13-Day MA. Positive. Above the 150-Day MA. Positive. Indicators: Stochastic: 75.9. Above its signal line. Below overbought. Still has room to move. The 13-Day MA is above the 150-Day MA and heading up. Positive. RSI.9 is at 66.7. Positive. In a zone where pull-backs can occur. MACD Histogram Above Zero . Positive. Potential negative divergence may be set up. MACD above zero. Positive. (Not shown on above chart.) CCI.9: 128.5. Overbought. (Not shown on above chart.)
At this stage ? the short term trend has reverted to the upside (confirmed).
The market is close to overbought. A small pull back might be in order. But I doubt it will challenge the recent low. Earnings reports and the debt ceiling discussions will continue to grab headlines.
The current run-up has been on the back of a strong Banking sector. Technology hasn't shown the same sort of strength. That's setting the scene for some weakness.
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