morning traders 25 / 10

Morning traders,

Its worth spending some time reading Paddington Bears morning wrap, sometimes I imagine many dont follow the link so here it is. Hope you dont mind PB. Have a good day all.

"Wall Street threw off its concerns from the previous day as buyers dived back into the shark pool. However, I have looked through all of the main indices that I check each day but the only index that was at a new high was the Dow. Everything else had an “inside day” – trading restricted to inside the range of the previous day. Not even my canaries, JNK and HYG could break free. So…..this sort of action leaves the picture far from clear.

US dollar tried to break topside – again – but still was not able to do so. Gold appeared to have reached a stage of ignoring everything and just holding in its sideways pattern. This is potentially quite good.

I mentioned yesterday that XME (Metals and Mining ETF) looked nice. It wasn’t having any inside days – it broke topside out of a lovely big pattern. This is so good for our mining sector as well. Our present from the market Gods today!!

Unfortunately the lithium ETF (LIT) was still not able to break topside.

I need a cobalt ETF – couldn’t track any down. Looking for suggestions on what stock would be the best indicator for this market. Doesn’t have to be Australian and I’m not really thinking in the low range stocks. Just as an indicator.

Another jolly sign overnight was the oil price. Been tracking sideways for such a long time. I admit that sometimes it does look as though it might fail but at the same time it gives off a few hints now and then that it really would like to move higher for a bit and today was one of those hints. What is really interesting however, is that XEJ – our own Energy index – looks as though it might have formed a nice big base pattern and threatens to break topside. I need crude to get on with the job.

So, despite so much indecision on Wall Street, there are still some really good trading situations building out there.

Our market had another mixed day with the banks seeing a bit of selling after such strong rises. My problem at the moment is the XTL (20 leaders) is showing very overbought which makes me a bit cautious. But we do know that markets can stay overbought for longer than we would have think normal. However, perhaps the stocks lower down the lists that have been keeping the Index sideways all year, will get back to carrying the load.

Specs were marvellous again yesterday but money really is moving around at quite a pace. Just remember that stocks have corrections."