Comment: A very strong day on the American market. The more volatile Transports and RUT (Russell2000) did better than the major indices. That?s positive. The Nasdaq100 which was lagging had a good night. Some confidence returned to the New Highs/New Lows with New Lows at 25 and New Highs at 68. That's the first time since 1st June, that New Highs have risen above 50. Those two indices are pincing inwards and are now at the meeting point - but haven't yet crossed. Volume was low ? but up a little on yesterday. There's not a lot of conviction in the buying - that may be a blessing ? high volume might conceal selling by the smart money.
The Materials Sector +2.57% and Energy Sector +1.99%. (Good numbers for Australia.) Eight out of nine S&P Sectors were up. Consumer Staples, a defensive, was the only sector on the negative side. The Banking Sector was strong +1.08%, Semi-conductors had a very strong night, +2.54%.
Europe: France +2.04% Germany +1.89% London 1.44%
The DAX (Germany) has pulled well above the neck line of a possible head?n?shoulders top. That?s a positive.
Gold in U.S. Dollars is up +0.53%. Gold in Oz Dollars is up +0.35%. AUD/USD up 0.24% to finish at 106.06. Major support lies around 105. Overhead resistance still needs to be overcome at around 107.7. EWA (the ETF for Australia) was up +1.78%.
Technical Comment on the DJ Industrial Average: The DJIA finished at 12190.01. First line of support now lies at 12120 area. Above the 13-Day MA. Positive. Above the 150-Day MA (positive). Indicators: Stochastic: 41.5 . Above its signal line and heading up. Positive. The 13-Day MA is above the 150-Day MA. Positive RSI.9 is at 54.1. Now in an uptrend and above 50. Positive. MACD Histogram above Zero . Momentum is now to the upside. Positive MACD below Zero. Negative. But above its signal line. CCI.14: +88.4. In an uptrend. Getting close to the overbought level at +100 (Not shown on chart above).
The Indicators are have turned positive, with all but the MACD showing bullish readings. This is the most positive technical picture we've seen in this retrace.
The VIX is back below the 200-Day Moving Average. That's a big positive. . Chart Pattern
The chart has had four days up and above a short term horizontal resistance area at 12120. Now at the next level of resistance. The DJIA has had four days up only once in this retrace. The market then sold off strongly. That was at the beginning of June.
The market could see some hesitation here. A pull-back to the 12120 area and bounce above today's close would be positive. A big move down below 12120 on heavier volume would be a negative.
(20min delay)