The market Gods were smiling on me this morning – silver – what a move. Just amazing. It looked a smidgen better yesterday which was giving me a bit more confidence in the gold outlook but for silver to break out and run away like this is just fabulous. The tide has turned. But to keep a little bit of sanity, it still needs to break its downtrend – touched it last night. I know that we don’t have much in the way of silver stocks in Australia but just watch the market find a few!! And my good friend palladium continues to do its thing as well. What a wonderful indicator it has proved to be again.
I mentioned yesterday that the gold/silver ration was just nudging the trendline – well that got absolutely smashed.
Metal prices generally were all green on my screen – copper really buzzing. Oil better. Even iron ore and coal! Happy days are here again……
Wall Street was mixed. I just cannot get excited about it at the moment. The Dow had the smallest range in ages – just one hundred points. Say it quickly and it means nothing but I can remember not too long ago when a hundred point day on the Dow was something to rave about – now if it isn’t three or four hundred points, it means nothing. I had originally been looking for Wall Street to rally through April so should be happy with it, but I feel really uneasy.
And here is the reason I am cautious – Shanghai. Yesterday it went back and had another look at its February low – fractionally exceeded it and then rallied to finish at its high for the day. Yes, it has good support down here but a bit worrying that it is at the bottom of its range while New York isn’t. However, the fact that Shanghai did rally so well yesterday gives us some more time to make up our mind about the big picture on Wall Street.
But this morning it does seem to be more about commodity countries – Canada and Brazil absolutely zoomed overnight. But the Australian market…..yesterday I said that we had three important lines coming through between 5865/5875. So what did we do - rallied to 5864.8. Honestly these markets are driving chartists insane. The index knew exactly where those lines were and stopped .2 off it. Hopefully with so much love about today we should do better but with the dismal news coming out of the enquiry, I would suggest that sector will continue to be a dampener on the market. However, as I keep saying, further down the lists our market has been just as much a winner as other markets. The only difference in Australia is that some of the biggest companies in the index are in clear downtrends. The Greed is Good attitude may have been out in the open in the eighties but it would seem that this attitude has been little more sophisticated but just as pernicious in the noughties.
If we break these three important lines on my XJO hourly chart – which we should with the overseas news – it should let us run quickly back up to around 6000.
All us traders should find the atmosphere a little more interesting today.
I see I have the word should mentioned a number of times – let’s change it to will…..
(20min delay)