Ten days now that the SPX has been locked in this small range. Apparently it is the smallest percentage range over this period from records going back to 1980. Little wonder that it is driving us all insane. Friday it looked like the buyers were gaining control but after an initial level of buying, sellers got the upper hand again by the close. Just going to have to wait till the market confirms which way it will break but the longer this goes on, the greater the risk that the break will be to the downside. But keep in mind that it is usual in markets that a period of very quiet trading is ultimately followed by very sharp moves.
Not a good day for the Australian government. Both Iron ore and Coal were weaker. As I have mentioned previously, I see both these markets ultimately considerably lower over the longer term. I was hoping that they could have a rally from the support area they are both sitting on but that is becoming less and less likely.
In the meantime, I posted yesterday afternoon that I had had a long study of the Australian gold price. I have come up with some targets. Should make it clear, that I am talking longer term and we must have confirmation of the end of this consolidation period. The Australian price when I did these calculations was A$1661. I have a first target of A$1770 and then A$1880. Once we get there we can have a further think about it. But again I stress, that I am not talking short term.
The next market I have to have a long study of is copper. The recent weakness is very concerning. What makes things difficult is that the longer term picture is complicated. Is there enough long term support in this area or will this market also find support wanting?
Keep an eye on Shanghai. I have mentioned before that it really worries me. Yesterday it broke down through support. It has already had six down days so we should soon see an attempt back towards the resistance but it is really looking awful.
Australia has been doing such a good job of trying to build on the support at 5800 but won’t be able to do it alone. Will be watching how we cope with the overnight news today. Not much there we can get too excited about.
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