Morning Coffee. Wednesday, 13 April, 2011

In America:

1. Dow Industrials -0.95% 
2. Dow Transports +0.31%
3. SP500 -0.78%
4. Russell 2000 -1.39%
5. Nasdaq100 -0.7%

Comment: Apart from the Dow Transports other major indices had strong losses.  The Russell 2000 (small caps) showed how risk averse this market has become with a big down day.  The Transports were up on a much weaker oil price -3.51%.

Europe

1. France -1.54%
2. Germany -1.42%
3. London -1.47%

EWA (Australian Shares ETF traded on the New York Stock Exchange) -1.92%.  The Australian Dollar was once again weak -0.58% to finish at 104.38

Technical Comment on the American Market:

1. SP500 is in a clear down trend.  Today's close was 1314.16.
2. Market now down four days in a row and hitting the 50-Day MA.  That could provide support.
3. For a clear medium term "sell" signal I like to see five indicators in sync:
• Slow Stochastic below 80 (condition met)
• Break below the 13-Day MA (condition met)
• RSI below its mid-line (condition met)
• MACD Histogram below Zero (condition not met)
• CCI below 100 (condition met)
4. Volume was higher than the previous three days and about equal to the 50-Day Average.  No panic selling. 
5. Significant horizontal support in 1300 area.

Four out of five conditions for a "sell" have been met.  MACD Histogram is close to Zero.

In the short-term, the SPX is very oversold with an RSI.2 down at 1.92 (close to zero).  The Index is at a seven-day low.  A bounce here is likely.

  

In the past 24-Hours Gold in Ozzie Dollars has fallen -0.17% (despite a weak Ozzie Dollar).  That's a plus for our market today.

Our market will probably be down early in the day, but some recovery might occur later (given the possible bounce in America tonight).  

Earnings season has started in America with a downward jolt.  But any pleasant surprise could slow or perhaps reverse the current downtrend.  Tonight is a big one - JP Morgan Chase.

We shall see.

Cheers

Redb