Morning Coffee. Friday 1st April, 2011

Morning review:

America

1. Dow Industrials -0.25%
2. Dow Transports +0.44%
3. SP500 -0.18%
4. Russell 2000 +0.38%
5. Nasdaq100 +0.11%

Comment: Mixed day. See Technical Commentary below

Europe

1. France -0.88%
2. Germany -0.22%
3. London -0.16%

EWA (Australian Shares ETF traded on the New York Stock Exchange). +0.3%

Australian Dollar remained above 103 last night. +0.04%. That's a positive for our stock market.

Looks like we'll have a shaky start to our market today.

Technical Comment on the American Market:

1. Current run-up in the Dow Industrials is similar in scale and time to run-ups in June/July 2010.
2. Index is now at February high
3. Negative divergences on RSI and MACD
4. Stochastic is overbought.
5. Narrow-range bar last night on heaviest volume in eight days.
6. Market struggling to get past significant resistance.

All that adds up to the probability of at least a mild-pullback. The current resistance area around 12390 in the Dow Industrials is significant. If the next night is a big down day - expect further weakness.

That assessment is similar to the one I posted about the Australian market last night. Australia often leads significant moves. So I'll be watching today's action in Australia very carefully.

Do your own research. Don't take any notice of what I say. :)

Good luck

Red