XJO and World Markets - Discussion and Charts, page-52

In America:

Nasdaq Composite +0.67%. New York Composite +0.54%. Russell 2000 +0.52%. Dow Industrials +0.23%. SP500 +0.51%.

Most indices were up moderately – the exception being the Dow 30. Indices are well up around 3.00 (NY time) but sold off in the last hour. Russell 2000 was up nearly 1% early in trade but gave back about half of that. The Dow 30 gave up about half its gains in the last hour. Other indices saw some selling late in the day, but not to the same extent as the Dow 30.

Apple was looking shaky in Monday’s trade, but showed some strength in this session, up 1.3%, this helped the Nasdaq to the best finish of the major indices.

All nine Industry Sectors finished on the plus side with the best performers Health +1.61% and Materials +1.2%. (The Materials Sector in America has a somewhat different composition from the Australian Materials Sector which is dominated by Miners. Chemicals, e.g., are on a par with Mining and Metals in the American Index.)

Here’s the detailed chart for the SP500:



The Index has broken marginally above the restraining line of the megaphone formation I’ve been talking about for some time. RSI.9 is now extremely overbought at 80.4. So there doesn’t seem to be much more in this.

This week is Options Expiry Week. It has a bullish bias, up >70% of the time. So we could see a bit more upside by the end of the week.

Commodities:



Industrial Metals Group down -0.93%. Copper in America down -1.06%. Spot Iron Ore down -4.2%. (I mentioned yesterday, that IO had broken down a little from its recent seven day consolidation. But this was dramatic.) GLD +0.88%. US$ -0.47%.

Here’s a one year comparison chart of the ETF for Industrial Metals (DBB) and the Australian All Ordinaries Index:



This shows a high correlation between the two. What happens in the Industrial Metals Group has a big effect on our stock market – not just the Mining Sector. (The correclation going back more than one year is not as clear cut as this. So this might continue working – or not.)

Oz Stocks in NY:

BHP -1.12%. Rio -1.95%. Westpac +0.38%. ANZBY -1.54%. EWA +0.08%. Ozzie Dollar +0.15%.

It seems likely we’ll have another mixed bag today. I feel for anybody who has big holdings in the pure iron ore miners. Gold Miners will have another good day. I’ve been bullish on the Gold Sector for over a week now – and that optimism is paying off. The positive lead in America and the stronger Ozzie Dollar should have a positive early effect on our market – but the Miners are going to be a drag today. What happens later on is in the hands of the Stock Market Gods.

Redbacka