I have a question for everyone this morning – could Australia become the flavour of the month?
I mentioned yesterday that I am suddenly finding that the XJO is doing what I am sort of thinking it should from the charts – been a while since it has “behaved” so well. This has me wondering if perhaps the XJO could start to fulfil the latent potential that has been lurking there for some time. Would probably need the banks and for the life of me, I cannot see why they would start to pull their weight but I suppose stranger things have happened. For a start all four are trading around where they were in 2013. I know they have been paying fat divvies but still not a very good overall performance. In fact it is these fat divvies that have made the XJO so unrepresentative of the whole Australian market.
So, need a bit of time but I must say I am encouraged.
Not helping the spec end of our market very much at the moment. Need to track down where the next wave is going to fall. Been a bit of interest in medical stocks but hardly enough to call a wave at this stage.
I have spent a considerable amount of time pondering the gold market. Looking at my charts, I keep coming back to silver and thinking that it is silver that is holding gold back – each time gold rallies – silver remains determinedly obstinate. So, I decided that I needed to spend some time actually analysing silver. I have come up with one little bit of information that might be of interest from the COT figures - it would appear to me that this is the first time (from the history I have available) that the large speculators have finally sold their long silver positions and now have a small short position. At the same time the Commercials (who are the ones that are usually right) are only minimally short. So I was thinking that this doesn’t necessarily mean an instantaneous rise but could be beneficial fairly soon, so what happens overnight – gold is up one percent and silver is up nearly two percent! Interesting also that the gold/silver ratio was below 80 for the first time in some weeks.
Added to this, our gold index (XGD) actually did a pretty good job yesterday of leading the whole gold scene by closing just above its recent little downtrend.
In the meantime, New York had another up day but looked to be struggling towards the close. I realise that if New York fails to carve out a bottom then all bets are probably off that Australia could make up for some lost time. Particularly watching the Nasdaq Comp index as I think if New York is going to continue higher, it will be this sector that leads. Just remember though – the phase of nice steady rises is over – volatility is now the name of the game.
(20min delay)