Morning Comments. Thursday 20/1/2011

Well, my "rocky road" suggestion from yesterday didn't play out. My faith in the Australian market as a predictor for the American market is now shattered. :)

But the American market did suffer last night. Yesterday I pointed out that the Dow/Vix were both up and is usually a good sign that the next day will be down.

The above chart is a variation on the one I showed yesterday (Ratio of Dow:SmallCaps).

This shows the SPX:RUT - S&P500 to the Russell 2000. This suggests that risk appetite in the broad market is collapsing.

This could get ugly.

Last night:

1. Dow Jones down -0.11%
2. S&P500 down -1.01%
3. Russell 2000 down -2.56%
4. AUD/US$ = 100.06, up +0.25%

The strength in the Australian Dollar might ameliorate falls in the Ozzie market to some degree today (unless our dollar falls during the day). But - there seems no doubt we'll be down today.

Good luck

Red

Good luck
Red