Trying again - a bit late after an earlier snafu. Better late than never?
In America:
Nasdaq Composite -0.47%. New York Composite +0.11%. Russell 2000 -0.91%. DJ Industrials -0.1%. SP500 -0.16%.
Three of the five major indices were relatively flat. After a poor morning session, the Dow Jones, SP500 and NYA saw some modest buying in the afternoon session. The other two (Nasdaq and R2K) failed to make any head way. Opinion will now be divided. Many will be saying that Friday’s good results are a dead-cat bounce, others will be saying that Monday’s action was a pause needed after Friday’s big up day. I think we need to see some more action. All of the indices are below major MAs – so the dead cat theory may be right. According to Yahoo, the Advance/Decline Ratio was 49.5% which goes along with the flat figures on Indu, SPX and NYA. NYSE Trin was a mildly bullish 0.88. Nasdaq is the weak one. Its Trin was a bearish 1.22.
Here’s the detailed SP500 chart.
SP500 remains within the up trend channel. The three-day candle reversal last week is a usually reliable pattern.
The chart has plenty of upside resistance, but the 50-Day MA remains above the 100-Day MA, so the index remains on “bull” status. We need to see a break below the oblique support line of the uptrend channel for the bears to get dominance. Over the past two years, the Buy-The-Dip strategy has worked. There’s no reason at this stage to suspect it won’t work again. But all trends must end. So watch that oblique support line.
Commodities:
CRB Index up +1.41%. WOW. Industrial Metals Group +1.04%. WOW. Copper +1%. WOW. Iron Ore +0.1%. (Can’t win ‘em all, at least it’s not down.) Precious Metals Group +1.34%. WOW. GLD +1.24%. WOW. With results like that, U.S.$ is down -1.13%. I was bearish on the U.S.$ in the Weekend Report. Today’s action was especially bearish:
Oz Stocks in NY:
BHP +1.28%. Rio had a huge spike, up +9.12% on news of a possible merger with Glencore which would make it the largest mining company in the world, eclipsing BHP. Westpac +0.46%. ANZ +0.2%. EWA +0.5% Ozzie Dollar +1.02%.
Here’s a snippet from the SMH this morning on the Glencore speculations:
Glencore is crunching the numbers on a potential merger with Rio Tinto next year that would create the world’s largest mining company but is likely to face opposition from regulators and Rio board.
Bloomberg reported on Monday that Glencore had “reached out” Rio’s largest shareholder, Chinalco, to gauge its interest in a potential deal. The discussions with the state-backed Chinese company, which owns 9.8 per cent of Rio, took place in recent weeks, according to Bloomberg.
Read more:
http://www.smh.com.au/business/mini...nto-merger-20141007-10r3k0.html#ixzz3FPM7PQwr
In a release to the ASX this morning, Rio denies that any talks are being conducted:
Statement regarding press speculation
7 October 2014
The board of Rio Tinto notes the recent press speculation regarding a possible combination of Rio Tinto and Glencore.
The Rio Tinto board confirms that no discussions are taking place with Glencore.
In July 2014, Glencore contacted Rio Tinto regarding a potential merger of Rio Tinto and Glencore.
The Rio Tinto board, after consultation with its financial and legal advisers, concluded unanimously that a combination was not in the best interests of Rio Tinto’s shareholders.
The board’s rejection was communicated to Glencore in early August and there has been no further contact between the companies on this matter.
I looks like being a wild ride for Rio today on our market. In pre-market trading, Rio is up about +2%. It makes up >10% of the Materials Index – so, that’s a big positive for the Miners today.
We had a down day yesterday. I thought that might be a pre-emptive action before overnight trading in NY. It looks that way now. Given the overnight positive commodities effect, and speculation about Rio, it’s difficult to see how we’ll be down today. Strength in the Ozzie Dollar should do a little for sentiment towards out Financials Sector.
Redbacka
(20min delay)