Morning Coffee, Thursday, 28 April, 2011

In America:

1. Dow Industrials +0.76% 
2. Dow Transports +0.87%
3. SP500 +0.62%
4. Russell 2000 +0.62%
5. Nasdaq100 +0.73%

Comment: Momentum continued upwards.  Uncle Bennie didn't bring any showers on the post-Easter parade.  The Materials Sector was up +0.32%.  That's a plus for Australia.  The Banking Sector was strong +0.96%.  Semi-conductors was flat +0.04%.  hmmmm. 

Europe:

1. France +0.55%
2. Germany +0.66%
3. London -0.02%

EWA (Australian Shares ETF traded on the New York Stock Exchange) +0.21%, The Australian Dollar was up +0.9% to finish at 108.74.   That's another positive for our market.

Technical Comment on the American Market:

1. The Dow Industrials finished at 12691
2. The Index is above both the 13-Day the 50-Day MAs.  Positive.
3. Indicators:
• Slow Stochastic 96.3.  Overbought
• The 13-Day MA is above the 50-Day MA.  Positive
• RSI above its mid-line, now 69.1.  At the top of the caution zone (60-70)
• MACD Histogram above Zero.  Positive.  
• CCI +241.7 and rising.  Above 200.  Overbought.
4. Volume was less than yesterday.  The trend in volume since the market bottomed in mid-April has been steadily down.  That's not a good sign.
5. Two consecutive closes clearly outside the Bollinger bands.  That sets the market up for a short term consolidation or retracement.

In the past 24-Hours Gold in Ozzie Dollars was up +0.97%.  That increase in the Ozgold price was due to a huge rise in U.S.Gold - not a falling Australian Dollar.  So that can be discounted as a negative for the broad Australian market.

And the price of oil remains high - now above 113 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 clearly overbought.  My opinion:  this is not a time for entering the market. 

Good luck

Red