Comment: A flatish day with the Dow Industrials and Nasdaq100 up a little. Volume was down. Momentum is decreasing with lower volume as the major support level is approached. A major push on higher volume will be needed for this to go lower.
NewHighs/NewLows came in at 13/247. The figure for New Lows is back to extreme panic levels, but nothing like we saw at the previous low earlier in August.
The Materials Sector 0.00% and Energy Sector -0.81%. Those numbers hold no joy for the Australian market on Tuesday. Four of nine S&P Sectors were down with one flat. That?s even ? much like the market. The Banking Sector was down, -1.1%. Semi-conductors was up, +0.81%.
Europe: France +1.14% Germany -0.11% London +1.08%
Gold in U.S. Dollars is up +1.91%. Gold in Oz Dollars is up +1.8%. AUD/USD fell, +0.1% to finish at 103.98. Flat. EWA (the ETF for Australian shares) up +0.13%. Flat.
Technical Comment on the DJ Industrial Average: The DJIA finished at 10854.65. Mid-way between resistance at 11000 and support at 10700 (round figures). Below the 13-Day MA. Negative. Below the 150-Day MA. Negative. Indicators: Stochastic: 18.8. Oversold. The 13-Day MA is below the 150-Day MA. Long-term negative. RSI.9 is at 34.1. Oversold. MACD Histogram marginally below Zero. Neutral. MACD below zero. Negative. CCI.9: -89.6. Bounced off -100, but I wouldn?t put too much weight on that. 10700 area beckons.
The Federal Reserve?s economic symposium at Jackson Hole is held later this week. Last year?s meeting resulted in Ben Bernanke signalling QE2. Many market participants are expecting something similar this year. The Fed?s market activities have had a distinct effect on equity markets. When the Fed is buying bonds, the equity market goes up. When the Fed is not buying bonds, the equity market goes down. When the Fed is selling, the market gets whacked. (That?s what happened in the GFC.) What?s going to happen between now and Jackson Hole? Probably a bit of dithering. What happens if Jackson Hole is a fizzer? (No announcement by Big Bennie). The market will get whacked.
Chuck Butler (from Everbank in the U.S.) is as American as Apple Pie and the Forth of July, but is a canny tactician with lots of experience and good contacts. Here's what he says about Jackson Hole:
"Well? this week, is the annual Fed boondoggle at Jackson Hole, Wyoming? At last year?s boondoggle, Fed Chairman Big Ben Bernanke, chose to announce that the Fed was going to implement another round of Quantitative Easing (QE2)? Big Ben doesn?t speak until Friday, so as the week goes on, there will be lots of buildup and perspective as to what he will say this year. I?ve even read that he could announce QE3 here? I doubt that, but, you never know!
"There?s lots of talk in the markets about another round of QE, but I don?t think the timing on the announcement this week is right? However, I do believe that Big Ben will choose to discuss the Fed?s options? and if QE is one of those ?options? then the floodgates will open."
(20min delay)