Moderate day up. Tuesday Postprandials. 24 February, 2015.
XJO up +0.3% after being down in early trading. 50 Leaders up +0.4%. Mid-Cap 50 down -0.2%. That discrepancy tells us that it was basically the big stocks (such as the four big banks and the two big miners) that kept the market afloat today. This is confirmed by the volume figures. The volume was about the 20-Day Average, but the UpVol/DownVol Ratio was strongly skewed to the Down Volume side of the equation.
This continues to look like a bullish consolidation (as I commented yesterday) – but at this stage of the trend with a mildly overbought RSI and a falling MACD Histogram, anything can happen.
I wouldn’t sell out. But I wouldn’t buy.
You can see on the chart how the Index has been riding up above the deeper yellow Bollinger Bands (20.1) since late January. If it falls into the deep yellow and MACD Histogram falls below zero – we’re probably in for a short term pull-back, or maybe just continuation of the sideways consolidation.
Here’s the chart for the Financials X-Property:
XXJ has dipped into the deep yellow without a significant fall. The sideways consolidation has been in place since early February. This also can go either way. That neat consolidation rectangle on the chart should be taken as a guide for direction. Break upwards – further upside. And vice versa.
Here’s the chart for Materials (XMJ):
The short term pull-back appears to be over. Today's upside action suggests more to the upside.
Indicators are not so friendly. That’s not uncommon when momentum eases off. But the negative divergences which are setting up are cautionary flags.
I showed the chart for the Gold Miners Index yesterday. Here's an update.
Nothing much has changed from yesterday. We haven’t seen a “squeeze” on the BBs of this nature for a long time. Certainly nothing like it in the past two years.
Such events usually precede a big move, one way or the other.
XGD has been performing well compared to the POG in US$ terms. That suggests the next move will be up. If that happens, it should, again, be a solid tradable rally.
Two big stocks caught my eye today. QBE and WOW.
Here's the chart for QBE:
"Holy Moly Batman. What happened? That's a rocket," said Robin.
"Yes Robin. That's what can happen when a stock issues its half-yearly report," said a smug know-it-all Batman.
"What should we do now?" said Robin.
"Hmmm." said Batman. "Perhaps we should ask our Super-Hero Friend, Redbacka. I'll see if I can get him on the Bat Phone."
One ring-i-ding-i. Two-ring-i-dingi. Three ringi-dingi.
"Sorry Robin. No answer. He must be writing his nightly report. He does get a bit obsessed. Bless his Soul.
Maybe if we read his report in the morning we'll know what to tell our stock broker."
"Holy Moly, Batman. Did Woolworths release its half-yearly report today? That's an amazing LEAP by Woolies."
Batman replied, "Sorry Robin to disappoint you. No, Woolworths didn't announce its Report today. That comes out on Friday."
Robin: "Well, Batman. Why did WOW jump so much today?"
Batman: "I haven't a clue, Robin. Maybe I should ask Spiderman to climb up to J.B.Were's office at Level 16 in 101 Collins Street, Melbourne, break the outside window, climb in, and see what he can find out about what they've been doing. Maybe he can find out - and let ASIC know."
Drum beat. ........ Only in the cartoons, folks. Coming to you at a TV channel ............... sooon. It's gonna be on a par with the Simpsons.
(20min delay)