I had internet connection problems last night, so I couldn't put up the usual evening comments. So today will try to come to grips with action in both Australia yesterday and overseas last night.Australia, as expected, was up moderately, +0.49%. The Fifty Leaders, +0.6%. The Small Ordinaries, +0.3%. This continues the underperformance of the Small Ordinaries, something I've been banging on about for a couple of weeks. Unless the Small Ords performs well on a relative basis, breadth is lacking in the market. That's a negative.
The best two sectors yesterday in Australia were Telecoms +1.6% and Consumer Staples +1.4%. Both are defensive sectors. The worst two sectors yesterday were Health -1% and Utilities -0.8%. Both are defensive sectors. The stock market loves to play with your head.
Personally, I'd put more faith in the Small Ords number as a bearish sign.
A lot of technical damage has been done to the Australian market. But it has bounced right at the 50-Day Moving Average. That's a positive.
At this stage, I wouldn't like to bet on the upside or the downside - but, in the medium term, I'm leaning to the downside. That means a continuation short-term of this bounce and then another leg down. On the XAO (All Ordinaries) serious resistance now lies at 4950 - not that far away. If that can be breached then we're looking at 5030.
Overseas, the Dow Industrials +0.51%. The broader market was better. (See box above.) Dow Transport Index +1.04%.
Europe: London 1.37%, France 1.51%, 0.77%.
Commodities: CRB Index +1.57%. Gold in Oz Dollars fell -0.37% while in USD it rose +0.53%. That tells us that the Oz Dollar must have been strong +0.82%.
The ETF for Australian shares on the NYSE was up strongly +1.96%.
All that suggests that Australia will probably be up on Monday. Unless ........................ ??????
Good luck
Red
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