The Brains Trust, page-13624

Wall Street was little changed overnight. As I mentioned yesterday, I am very interested at this stage in whether there is a growing number of divergences happening. I pointed out yesterday that despite the strength of the S&P and the supposed weakness of commodities, the S&P had not gone to a new high on this latest rise in relation to commodities. Looking further for divergences, another one that has me a bit uneasy is the number of stocks on Wall Street above their 50 day moving average. This latest run up to new all-time highs on the S&P was not accompanied by a higher number of stocks above their 50 day moving average than was set in June. Any one of these divergences on their own doesn’t spell the end of the bull market but if they continue to grow on each advance then it definitely weakens the overall structure. But these things do take time – all we can do is be aware of the situation and watch if the number grows on each advance and if it does, then the overall structure of the market is definitely weakened.

The US dollar was little changed and is currently sitting on its initial support. How and if it bounces from this level will be very telling so we need to continue to focus our attention here.

Asian markets were little changed although the Sensex (India) charged through to another new all time high. Certainly been the star market for some time now.

Commodities were generally weaker and very hard to see any features.

Another new all time high on our XMD yesterday and interestingly the XMM (mining) broke a month old downtrend while XXJ (banks) poked its nose above a very short term but steep downtrend. But we need to do more than this to get our market moving properly.