What if Cats and Dogs had Opposable Thumbs.....Friday, page-5

In America:

The bears had a rare victory last night as mean reversion set in and focus shifted to FOMC interest rate rises:

DJ -0.53%, SP500 -0.59%, NYA -0.73%, Nasdaq -0.73%, Russell2000 -1.27%.



Dow Jones is very overbought. SP500 is overbought. Others have pulled back to below the overbought (RSI 70) level.

Yacht dreamers are now getting the jitters.

SP500:



The last time SPX was at the top of the Standard Error Channel it went into a six weeks long sideways trend until it hit the low side of the SEC. We can now expect to see something similar or, perhaps, a sharp pull-back.

ST Stochastic (14.3.5) remains below the LT Stochastic (50.10.10). That's now looking like a good leading indicator.

MFI went above 80 recently and has now pulled back. It looks like a H/n/S Top forming on the MFI.

VIX



VIX is being contrary, falling while the stock indices falling - it remains above the 50-Day MA. VIX tested the 50-Day MA today, but couldn't close below it. If we see a big up day in the next day's trading, that could signal the start of a bigger pull-back. In which case, we're probably seeing a "sell the rumour, buy the fact" scenario: i.e., the market will sell off before the FOMC meeting announcement on 15 March, and then rise when the announcement is made.


Commodities:

Commodities took it in the neck last night as the US$ rose and the Commodity Currencies (Australia, NZ and Canada) dropped. Ozzie Dollar was worst -1.41%.

DBC -1.58%. Industrial Metals -2.16%. Energy -1.54%. Gold -1.24%. Iron Ore +0.3%.

We’ll obviously be down at the opening and give back a big chunk of yesterday's gain.

Our market has plenty of support below: 20-Day MA, Super Trend Line, Lower Edge of the Standard Error Channel and then the 65-Day MA. I doubt the 65-DMA will break.



RB.