xjo - weekend charting and chat, page-7

For last night's session: SP500 -0.28%, Dow 30 -0.27%, Nasdaq100 -0.65%, Russell2000 +0.4%, Transports -0.07%.

The hectic downside pace has slowed. Volume was down a little on the previous session but still high when compared to recent events. Breadth was positive. R2K returned a reading of +0.4%, while the Advances/Declines Ratio was also positive at 1.35. Bullish Percent on the NYSE didn’t budge last night – no change. New Lows on the NYSE were at 40 – in the “nervous zone” between 25-50 but still not showing panic amongst investors. Indicators suggest there’s more downside to come. The chart is now into the Congestion Zone developed in December/January – so that should slow things up. The chart is not yet down to the 40-Day MA. It’s possible that once the Ukraine referendum (Sunday) is out of the way that the market will stage a relief rally. If we get a close above last night’s high, we should see a test of the recent highs back in early March.

The German Dax, which has led this pull-back, staged a big recovery last night right at a major support level. That could be an early indicator.

Add to that the positive signs from the good breadth results on the NYSE and we’re getting a recipe for a rebound.

BHP on the NYSE -0.34%. EWA -0.8%. Ozzie Dollar -0.05%. AUD remains above 0.90c.

The CRB Index (Commodities) is not showing the rises we expect in times of international tension – it was flat at +0.08%. It was also flat in the previous session.

GLD (ETF for the Gold Price on the NYSE) continued its relentless rise up +0.67%. Gold Miners (GDX), however, failed to impress – although up 0.36%. Gold Miners are leveraged to the POG – so any increase in the POG usually results in a much bigger increase in GDX. Despite the good final reading in POG, it was well off its highs – that probably accounts for the relatively poor result in the GDX.

The Money Flow Index is setting up a major divergence from price. This often leads to fall in the price. But – the trend is up. Don’t buck the trend.

Redbacka