A relatively flat, narrow range day. SP500 -0.03%, Dow 30 -0.19%, Nasdaq100 +0.16%, Russell2000 +0.3%, Transports +0.13%. The market opened higher then sold off with the low of the day just before noon (NY time). After that it was a slow trudge sideways to the finish line.
The chart is now at a logical place for a pull-back or consolidation. Minor horizontal resistance level and 50-Day MA. Only the CCI is into overbought territory – but only mildly. A few days ago I suggested we’d have to see what happens when the RSI gets to the 60 level. That’s where it is today. If we’re in a bear market, there’s not much more in this. The past couple of years, however, has required a reading well above 70 before any meaningful pull back occurs. At this stage I favour more upside, with a test of January highs likely.
US$ Gold also had a narrow range day at oblique resistance. It is overbought, RSI above 70. Yesterday the CCI reached above +200. It can go above +300 but it’s now into a danger zone. Not marked on the chart is a completed sloppy inverse Head/n/Shoulders pattern. The neckline is shown. H/n/S typically throwback to the neckline to test that as support. If the chart heads south of the neckline, then the H/n/S pattern is negated. We’ll see.
BHP +0.64%. EWA (ETF for Ozzie shares) +0.7%. Ozzie Dollar -0.09%. The BHP and EWA positive results look like catch-up dealing after a strong day in Australia yesterday.
Yesterday’s strong move on the Australian market was, at least in part, due to very positive trade data out of China. That positive sentiment did carry through to Europe (E100 +0.75%) but America shrugged its shoulders at that push. The pause in the American market looks technical, rather than fundamental. But a big down day tomorrow would signal the end of this run-up. Let’s see how the next session goes.
In Australia, I’ll be watching to see how trading goes in the big three I talked about yesterday: CBA, CSL and Newcrest. They all showed a degree of weakness yesterday. Follow through efforts today will be important.
The biggie today is Telstra. It’s the pin-up of dividend seekers. The report is out. Dividends have been increased from 14c to 14.5c. It touts an increase in NPAT +9.7%. NPAT is $1.704 billion against analysts’ average estimate of $1.817 billion. That might put a dint in the share price today. The report, naturally, puts a great spin on the company’s performance. The judge, however, will be the market today.
If you’re wanting to keep up-to-date with market happenings during the day, Brisbane Times, an on line newspaper produced by Fairfax Media, has a great resource called Business Day. It gives live updates during the day. Lots of good information. Their comments section also makes for interesting reading – but don’t take too much notice of them. No – I don’t have shares in Fairfax.
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