the most subtly intricate game... - thursday, page-5

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.

US Oil ETF +0.45%. Copper ETF +1.56%. Steel ETF +0.28%. Coal ETF +0.06%.

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.

Redbacka