Morning HLL & ALL, wow down we go again?The daily chart on the...

Morning HLL & ALL, wow down we go again?


The daily chart on the XJO broke down badly yesterday and breached a key support area, in theory the index should track lower from here. With a lot of doom & gloom already priced into our market (from this week) it would not surprise me to see some panic on the open which should then see bargain hunters and smart money move in to mop up. Lets see how it pans out but if you have a short to medium term view there is no denying today could be a great day to buy some oversold quality companies.

I think the China deficit story is largely due to Chinese New Year and from some reports I have read this is just a blip that will be reversed in coming months. The US still looks bullish to me and imo their big money will still be in "buy any dip mode"

The XAO (All Ords) daily chart is still intact (just) but lets wait and see where that ends up, if the index can manage to hold that white trendline (on the chart below) then we could see a fairly hasty recovery remembering that all the support that has just been breached will turn into resistance so it would take a very bullish effort to get some ground back (in the immediate term) from here imo.

If we look at the monthly chart (both XJO & XAO) there is still a chance our market can hold the bullish ascending trendline from March 09 lows (see XJO chart below). The XAO chart is particularly interesting as it shows the price is still above an important ascending trendline stemming all the way back to 1989.

XJO daily



XAO daily



XJO monthly



XAO monthly



XSO (Small ords)



DJIA



SPX



GOLD



You could sense from both the USD & CRB charts over the last few sessions that the dollar was setting up for a big rally and the CRB was setting up for considerable downside. This is now perfectly illustrated on both daily charts imo

CRB



USD



VIX



AUD/USD



Dow ends worst day in 7 months
Published 11:43 PM, 10 Mar 2011 Last update 8:22 AM, 11 Mar 2011

Reuters

NEW YORK - Fears about the economy and unrest in Saudi Arabia darkened the outlook for equities on Thursday, pushing major indexes below key technical levels.

The Dow's worst day in seven months came after reports that authorities in Saudi Arabia had opened fire on demonstrators, increasing anxiety about instability in major oil producing nations.

All three major indexes fell below their 50-day moving averages, a sign of deteriorating market strength. Sellers came out in force, with volume at 9.07 billion shares, above last year's daily average of 8.47 billion shares.

"The market just needed a catalyst. It was so extended," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont. "I think this is the beginning of something severe."

Energy stocks were the biggest drag after recent gains. The S&P's energy sector lost 3.6 per cent, with Exxon Mobil also down 3.6 per cent, even as crude oil rallied off its lows of the day.

Declining stocks beat advancers by more than to five to one on NYSE.

The Dow posted its biggest decline since Aug. 11, weighed down by industrial and energy stocks.

The CBOE Volatility Index or VIX, Wall Street's favorite gauge of investor fear, jumped 8.2 per cent to 21.88.

Analysts have been calling for a correction in the market after its big run up since early September. The S&P 500 is up over 23 per cent since then.

However, many investors have been using dips to increase exposure to stocks in the belief that longer-term economic fundamentals point to a slow steady recovery.

"I do think it is a buying opportunity," said Peter Andersen, a portfolio manager at Congress Asset Management in Boston, who said he had been buying stocks over the course of the day. "I'm adding to names that I've always liked."

The benchmark S&P 500 and the Nasdaq closed below their 50-day moving average for the first time since September. The Dow closed below the level for the first time since November.

An index of semiconductors, among the market's weaker areas this week, lost 2.5 per cent.

Brent crude futures ended lower, but settled nearly $US2 above their session low after news about protests in Saudi Arabia. Brent slipped 51 cents to settle at $US115.43 per barrel.

The S&P energy index is up 8 per cent since the start of the year, while the semi index is up 2.9 per cent. The S&P 500 is up 3 per cent since the end of December.

China swung to an unexpected trade deficit in February of $US7.3 billion, its largest in seven years, but economists said the drop was likely temporary.

US government data showed initial claims for state unemployment benefits increased 26,000 to a seasonally adjusted 397,000 and the US trade deficit widened much more than expected in January to $US46.3 billion.

Moody's one-notch downgrade of Spain, based on the costs of restructuring its banks, came with a warning that further cuts were possible. The agency downgraded Greece's debt earlier this week.

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