Morning Coffee, Saturday, 30 April, 2011

In America:

1. Dow Industrials +0.37% 
2. Dow Transports +0.09%
3. SP500 +0.23%
4. Russell 2000 +0.43%
5. Nasdaq100 -0.24%

Comment: Mixed market with modest strength in the Dow but the Nasdaq showed some weakness.  The Materials Sector +0.39% and Energy Sector +1.49% were both up.   That's a plus for Australia.  The Banking Sector lost -0.23%.  Semi-conductors was up +0.45%.  

Europe:

1. France +0.05%
2. Germany +0.52%
3. London - market closed for That Wedding

EWA (Australian Shares ETF traded on the New York Stock Exchange) -0.28%, The Australian Dollar was up +0.42% to finish at 109.72 - knocking on the door of 110.   That's another positive for our market - although the strength in the Ozzie Dollar has not had a positive effect on our market during the past couple of days.

Technical Comment on the Dow Industrials:

1. The Dow Industrials finished at 12810.9.
2. The Index is above both the 13-Day the 50-Day MAs.  Positive.
3. Indicators:
• Slow Stochastic 97.4.  Overbought
• The 13-Day MA is above the 50-Day MA.  Positive
• RSI above its mid-line, now 72.7.  Now out of the caution zone (60-70) and into the danger zone (above 70).  Overbought
• MACD Histogram above Zero.  Positive.  
• CCI +211.5 and dropping.  Overbought (above 200).  A dropping CCI while the market is rising is often an early warning sign of a coming fall in the market.
4. Volume was up - hugely - on a narrow bar.  Looks like a battle between bulls and bears and often a sign of a coming turn.  Interestingly, volume on the SPY (ETF tracing stock for the S&P500) was down for the third day in a row.  Lower demand.
5. Four consecutive closes clearly outside the Bollinger bands.  That's very overbought. 

In the past 24-Hours Gold in Ozzie Dollars was up 1.58% - despite having to struggle against the subduing effect of  the strong Ozzie Dollar.

And the price of oil remains high - now at 114 for West Texas.  How much longer can the price of oil continue rising without impacting broader economic concerns in America and their stock market?  As long as Uncle Bennie keeps flying his helicopter?

The American market is now even more overbought.  My opinion:  this is not a time for entering the market. 

Good luck

Lance