Comment: A narrow range day. The SP500, Dow 30 and R2K were all up modestly on lower volume than yesterday. An indecisive market with the last half hour quite weak. However, today was better than a kick in the guts like yesterday. :)
NYSE NewHighs/NewLows. 26/71. Ratio:26.8%. NL>NH. Back out of the “Do Not Sell” Zone (above 80%). Nasdaq NH/NL 33/26. Ratio: 55.9%.
Technical Comment on the SP500 (closed at 1634.96)
Indicators:
MACD Histogram: Below zero. Negative. Possible positive divergence. MACD: Below zero. Negative. No positive divergence. RSI.9 is at 33.2. Oversold. Stochastic. 22.3. Above its signal line and 20 but turning down CCI.14: -118.1. Oversold. Possible positive divergence. Money Flow. Below 27 – negative. Momentum: Below zero. Negative.
Support and Resistance:
Horizontal Resistance: 1669.2 (+2.09%). Horizontal Support: Pivot low in early June – 1598.23 150-Day TMA: 1608.9. 40-Day TMA: 1685.2 Gap Resistance: 1685.2
The SP500 bounced off the long term oblique up trend line from November, 2012. That coincides, more or less, with a down trend oblique support line from July. So far, the bounce has been weak. Dual Supports are often strong – but not brick walls. There are some possible positive divergences setting up on some indicators. But until we get a break of the recent down trend they are just “possibles”. I’d feel a little more confident about these with a positive divergence on the MACD. At the moment we’re in pause mode. Indicators are getting close to very low readings – but they could go lower yet – and cancel out those positive divergences. I think we’ll get another (weak) bounce here before another assault on the long term up trend line. If that holds, the market might have some tradable upside action.
Factors important for Australia (particularly Materials and Energy) US$ Gold ETF, -0.03%; Copper ETF, +0.06%; Light Crude Oil ETF, +0.54%; Coal ETF, -0.53%; Steel ETF +0.52%, AUD, -0.4%. The Ozzie Stocks ETF on the NYSE (EWA) -0.34%. BHP on the NYSE +0.25%.
Stocks reporting today in Australia: Qantas, Westfield, Westfield Retail.
Gold - The recent rise has been caused by multiple factors. One which almost all analysts miss is the recent big fall in the Indian Rupee. Rupee down - Gold price in Indican Rupees = upward pressure. Indians have a love affair with gold. Aside from the cultural proclivities, it's quite rational for Indians to buy Gold as a store of value with the Rupee falling.
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