Morning Comments 18/2/2011

The Dow Jones Industrial Index was up modestly, 0.24%. The Transport Index was up the same amount.

SPX was in line while the Russell 2000 was up strongly.

The odd man out was the Nasdaq 100, down marginally at -0.02%. This was largely due to a fall in the price of Apple -1.33%. Rumours are floating around about Steve Jobs' health which probably impacted Apple's share price. Rumours are just rumours. Steve Jobs is on Obama's list of technology executives he will visit during his Western tour.

Last night repeated the ongoing theme of the recent past. The market gaps down on opening, then recovers with a solid upward movement for the rest of the day.

The European markets were flat. French and London Indices both up +0.03% while Germany was down just -0.12%.

Gold in Oz Dollars over the past 24 hours was down a little -0.24% while Gold in USD was up +0.65%. Oz Gold was tracking US Gold until about 9 a.m. (US time) then carked it. Obviously something shot Oz Dollars upwards (dunno what) which put the kybosh on Gold in Oz Dollars.

The American market remains in Cloud Cuckoo Land with the RSI well above the 70 level. What's sustaining it? I dunno. Look at the volume - dropping away.

Today - our market? Probably another flat day. Unless there is a belated reaction to that Moody's downgrade of our four big banks. The CRB was up strongly again last night, so our Materials sector could carry the market higher today.

Just stepping back from the day-to-day stuff, have a look a the top chart. It's a ratio chart of the Emerging Markets ETF and the S&P500. Scary stuff. If the Emerging Markets (particularly China, India and Brazil) are expected to be the engine for the world economies, those stock markets are saying the engine is in reverse.

Good luck

Red