Comment: The smarties in Australia proved once again yesterday how good their judgement is. While most of Asia continued to tank yesterday the Australian market reversed upwards and finished positive. That was just a prelude to the American market last night which was down around 200 points (Dow Industrials) when the Federal Reserve made their announcement regarding interest rates at 2.30 pm.
Volume was once again high on the American market ? the sort of volume we expect to see at market turning points.
NewHighs/NewLows came in at 3/717. The New Low figure is poor, but a slowing in momentum. The New Lows the previous day were 1292.
The Materials Sector +6.16% and Energy Sector +5.09%. Those numbers are clearly positive for the Australian market on Wednesday. All nine S&P Sectors were up, with Financials the best +7.76%. The Banking Sector was up, +7%. Semi-conductors was up, +4.64%.
Europe: France +1.63% Germany -0.1% London +1.89%
Gold in U.S. Dollars is up +1.43%. Gold in Oz Dollars is down -0.68%. AUD/USD felt love, +1.83% to finish at 103.74. EWA (the ETF for Australian shares) was up an astounding +9.76%.
Technical Comment on the DJ Industrial Average: The DJIA finished at 11239.77. Back above the November, 2010 support at 11000. Below the 13-Day MA. Negative. Below the 150-Day MA. Negative. Indicators: Stochastic: 16.2. Above its signal line. Needs to get back above 20. The 13-Day MA is below the 150-Day MA. Long-term negative. RSI.9 is at 31.6. Back above 30 - that's looking positive - but still a long way from the mid-line. MACD Histogram below Zero. Negative. MACD below zero. Negative. CCI.9: -138.4. Needs to climb back above -100.
Yesterday I said: "At this stage at least a strong counter trend rally from somewhere in the 9750-10800 region looks probable."
Well, we didn't have to wait too long.
It looks promising, but I don't have a "buy" signal yet - unlike some I have a medium to long-term perspective.
This is a great market for the short term traders. Those brave hearts in Australia who bought yesterday and held overnight will get their well earned rewards today.
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