Weekend Charting and Chat. 16/17 May

Sat. a.m. 16/5/20 Dow Jones up modestly.

Yesterday in Australia:

Australia followed the American market higher yesterday, finishing up strongly +1.43%.

The technical picture remains muddy, with the XJO respecting the 50-Day MA which is sloping downwards.

MACD Histogram is flat which indicates a non-trending market. Wait for the break-out, one way or the other.

Yesterday's big rise was underpinned by strength in the Miners, with Materials up +3.25%. Base Metals (see below) overnight were, however, weak, so that pillar might be pulled away from our market on Monday.

Overnight:

Dow Jones +0.25%. SP500 +0.39%. Nasdaq +0.79%. Small Caps +1.31%.

Patterns in the four indices are at variance with each other. The Dow is in a gently sloping downward channel. SP500 is in a sideways channel. Nasdaq is in an upward sloping channel and Small Caps in a downward sloping channel. All four, however, are at the lower ends of their respective channels, which suggests we'll see more upside in the near-term.

SP500:


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SP500 has been sideways for about a month. It will probably head back up to the top of its sideways channel at around 2950 (round figures). The lower edge of the channel is at 2800 (round numbers). There is the possibility of a negative x-over of the 5/20 MAs. A break below horizontal support and a negative 5/20 x-over would change the short-term trend to the downside. Wait.

Commodities:


Commodities Index has broken to the upside from a bull flag, +0.99%. That was influenced by a strong move by Energy also breaking upside from a bull flag, +1.52%. Base Metals Index is caught in a pincer movement between the 20 and 50 DMAs, -0.79%. Gold continued its upside movement +0.56%.



Above is a ratio chart SPX:GLD. During the CV19 crash SPX underperformed Gold. During the relief rally from late March, SPX out-performed Gold. That out-performance may be ending with the recent downside break of the ratio chart from a rising bearish wedge. The recent strength in Gold could be an early warning of more downside, or, at least, underperformance of stocks.