XSO (ASX) The Brains Trust

Originally posted by paddington bear ↑

The most important feature overnight was continued weakness in the iron ore price. I have been thinking/hoping that it might have had a rally hidden there somewhere from that area of my fist downside target but it hasn’t even been able to find any real strength. When a market can’t rally from a major support area, then it is pretty serious. As I have said previously, ultimately I believe it is going back to the lows in December 2015 at the exact moment when Gina’s first shipment disappeared over the horizon.

Coal wasn’t much better and again has not been able to rally. Looking at my thermal coal chart, I have downside targets of 62 and then - like iron ore – back to the previous lows. Current price I am using is 73.45. Coking coal was also hit.

And the whole energy section very weak again. As I keep posting, I do not like the look of my long term chart on crude.

Iron ore, coal, oil – get the feeling there is a trend here???

When we turn to Wall Street – if one was just looking at the Banking section, it looks horrible. However, there was huge volume in that sector last night which does increase the chances that there still might be a bounce. The decline in most of the rest of the market was not severe which again is slightly encouraging so we still might get another spike up. Will see what another trading day brings. Mentioned yesterday that the Russell 2000 (RUT) was very weak – it fell early in the session but bounced nicely into the close so here again this is a bit encouraging when looking for another spike.

Gold bounced nicely but looks a bit extended short term. As I keep saying, longer term I am very optimistic on this sector – it is just these short term gyrations that make life difficult. Palladium has recovered nicely from a bout of weakness a week or so again and is back up near its highs. Needs to come off again and as I think it is leading, gold, I would anticipate that we have another correction on the horizon in gold.

Must mention the FTSE. I have been wrong on this market as it continued higher when I thought it had already topped. But have a look at what it did overnight – ran up sharply and then closed on its low. Mind you, the movements in this market are directly correlated to the weakness in Sterling which does make things a bit complicated.

I mentioned lumber yesterday and how I see it representing the US economic outlook. It got back to its support overnight and had a slight bounce. It needed to but at least it has a chance to rally now.

Our banks rallied yesterday relieving some of the oversold situation that existed. If we do see Wall Street rally again, then I suspect we can follow.

A little bit of interest in a few more specs again yesterday. The difficult part is trying to decide which of the stocks are going to move as so many of the patterns are quite similar – following the big move up they have mostly all come back and at least halved. I still prefer to “try” and find stocks with flat topped patterns as they have been quite reliable in the market. Just not many of them at this stage as most speculative stocks are bumping along what we hope are bottom patterns!

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Originally posted by paddington bear ↑

The most important feature overnight was continued weakness in the iron ore price. I have been thinking/hoping that it might have had a rally hidden there somewhere from that area of my fist downside target but it hasn’t even been able to find any real strength. When a market can’t rally from a major support area, then it is pretty serious. As I have said previously, ultimately I believe it is going back to the lows in December 2015 at the exact moment when Gina’s first shipment disappeared over the horizon.

Coal wasn’t much better and again has not been able to rally. Looking at my thermal coal chart, I have downside targets of 62 and then - like iron ore – back to the previous lows. Current price I am using is 73.45. Coking coal was also hit.

And the whole energy section very weak again. As I keep posting, I do not like the look of my long term chart on crude.

Iron ore, coal, oil – get the feeling there is a trend here???

When we turn to Wall Street – if one was just looking at the Banking section, it looks horrible. However, there was huge volume in that sector last night which does increase the chances that there still might be a bounce. The decline in most of the rest of the market was not severe which again is slightly encouraging so we still might get another spike up. Will see what another trading day brings. Mentioned yesterday that the Russell 2000 (RUT) was very weak – it fell early in the session but bounced nicely into the close so here again this is a bit encouraging when looking for another spike.

Gold bounced nicely but looks a bit extended short term. As I keep saying, longer term I am very optimistic on this sector – it is just these short term gyrations that make life difficult. Palladium has recovered nicely from a bout of weakness a week or so again and is back up near its highs. Needs to come off again and as I think it is leading, gold, I would anticipate that we have another correction on the horizon in gold.

Must mention the FTSE. I have been wrong on this market as it continued higher when I thought it had already topped. But have a look at what it did overnight – ran up sharply and then closed on its low. Mind you, the movements in this market are directly correlated to the weakness in Sterling which does make things a bit complicated.

I mentioned lumber yesterday and how I see it representing the US economic outlook. It got back to its support overnight and had a slight bounce. It needed to but at least it has a chance to rally now.

Our banks rallied yesterday relieving some of the oversold situation that existed. If we do see Wall Street rally again, then I suspect we can follow.

A little bit of interest in a few more specs again yesterday. The difficult part is trying to decide which of the stocks are going to move as so many of the patterns are quite similar – following the big move up they have mostly all come back and at least halved. I still prefer to “try” and find stocks with flat topped patterns as they have been quite reliable in the market. Just not many of them at this stage as most speculative stocks are bumping along what we hope are bottom patterns!

Expand

US stocks .... the odds favour the bulls.

JNK is making yearly highs
the S&P COT is bullish
the contract months are in backwardation
the market leaders AAPL, GOOG,FB, MSFT are all in new high territory. the point is that at major tops, the market leaders turn before the indices.
FDX is in new high territory. again this should peak before the indices. ( in 2007, FDX peaked at the beginning of the year.)
FICO scores are being readjusted favourably to enable more lending.

GOLD ....

GDX has been in a sideways pattern this year. notably the OBV these last 18 months is above that of the previous eight and a half years.
the contract months are in a contango pattern.
the COT is equivocal

i don't know what to think. so i just watch.