technology of the future - tuesday, page-2

What do you do when the lights go out? I found out yesterday. I was without electricity for most of yesterday while some work was being done on our property. Hence, no reports yesterday.

SP500 -0.07%, Dow 30 -0.23%, Nasdaq100 +0.06%, Russell2000 -0.27%, Transports -0.18%. Volume on the SPX was up marginally – still at the low end of the recent range. The market has gone quiet.

The SP500 was down early in the session, then the Buy-the-Dips Mob got to work at 11-o’clock (NY time) and brought the index back up. So it now shows a narrow range doji with a relatively long lower tail indicating some buying pressure.

The last few days have produced some “barbed wire” candles. A pull-back of some sort seems likely given how overbought the market has been. The congestion zone marked on the chart is likely to hold any pull-back.

Australia performed poorly yesterday, XJO down -0.9%. The miners were mugged. BHP, for example, was down over -4%.

Putting the fall in perspective, here’s a chart of the Materials Sector. (At one point, I had intended putting up this chart in Sunday’s Weekly Report – but decided against it in order to keep the Report relatively brief.)

After yesterday’s big fall, Materials still remains within its up-trend. The current up-trend is looking like the counter-trend rally of late 2012. If yesterday’s big falls are the king-hit for the Materials, we’ll know soon enough.

In last night's American session, the three biggest falls in country ETFs were: China -1.53%, Brazil -1.69%, Australia -1.2%. Brazil and Australia are, of course, big iron ore exporters to China. Poor economic data out of China was precipitated the big fall in our Materials sector yesterday.

Let's have a look at FMG:

The break down from the long sideways trend (nearly five months) makes FMG appear very very sick. It's now on the critical list. As so often happens in such cases, the stock is now very oversold. RSI.9 at 24.2. (Below 30 is extremely oversold. But this could easily go below 20.) This break could be a false break. Yesterday with a wide range on heavy volume could be an end move. Let's wait and see.

Ozzie Gold Miners were down yesterday -2.7%. That’s a big fall. Again – putting that into perspective:

Yesterday’s action isn’t terminal. The Goldies remain in a month-long sideways trading range. I'll wait and see which way it breaks from the range.


Redbacka