Trail Mix Wednesday, page-9

Wednesday Morning Joe. 31 August, 2016.

In America:



Sideways action continues. Dow Jones -0.26%, SP500 -0.2%, Nasdaq -0.18%, New York Composite -0.13%, Russell 2000 -0.09%. Indices are generally hovering around the 20-Day SMA, a measure of the short term trend... RSI on the DJ is at 50 - the mid-point.

NYSE NewHigh/NewLow Ratio remains bullish at 96.6%. New Lows are at6. That’s a low figure. If we see a big increase in New Lows, the up trend could be in trouble. We haven’t seen that today. NH/NL Ratio has been a good guide for remaining with the up trend.

SP500:



SP500 continues to trade in a narrow range with volatility low. MFI is now below its mid-line. DPO is just above zero. CCI is just above zero. The Bollinger Bands on the long-term Stochastic (50.10.10) are squeezed tightly together. The last two times that happened at the highs a down turn occurred. It wouldn’t take much more to send this into a short term down trend. Indicators are generally not a lot of use in low volatility, narrow range environments. So we'll just have to wait for a significant break in the sideways trend.

Commodities:




DBC, the Commodities Index tracking ETF, down -0.98%. This pullback is likely to be bought. Energy down -1.06%. Industrial Metals flat, -0.59%. Gold down -1.01%. Gold is entering a seasonally favourable period, but we'll have to wait for this down trend to end before thinking about taking a position. Iron Ore up +0.3%, now at 59.

After yesterday's action, XJO was at the lower end of a narrow range. I doubt we'll see a break below that range today, but, you never know.

RB.