Morning Coffee, Wednesday, 27 April, 2011

In America:

1. Dow Industrials +0.93% 
2. Dow Transports +1.85%
3. SP500 +0.9%
4. Russell 2000 +1.04%
5. Nasdaq100 +0.52%

Comment: Momentum picked up again today.  Results were general strong across the board with the techs just a little weaker than the others on a relative basis.  The Materials Sector was up +1.22%.  That's a plus for Australia.  The Banking Sector was strong +0.85%.  Semi-conductors was very strong +1.59%.  

Europe:

1. France +0.58%
2. Germany +0.84%
3. London +0.85%

EWA (Australian Shares ETF traded on the New York Stock Exchange) +0.53%, The Australian Dollar was up +0.55% to finish at 107.77.  

Technical Comment on the American Market:

1. The Dow Industrials finished at 12595.4
2. The Index is above both the 13-Day the 50-Day MAs.  Positive.
3. Indicators:
• Slow Stochastic 96.7.  Overbought
• The 13-Day MA is above the 50-Day MA.  Positive
• RSI above its mid-line, now 65.8.  In the caution zone (60-70)
• MACD Histogram above Zero.  Positive.  
• CCI +188.8 and rising.  Getting close to 200.  Caution.
4. Volume was improved over the previous two days - demand is good.  (Light volume the previous two days was probably an Easter effect.)

In the past 24-Hours Gold in Ozzie Dollars was down -0.52%.  That's a positive for our broad market.  

And the price of oil remains high - hovering above 110 for West Texas.

Yesterday I mentioned the danger signal being flashed by the VIX:VXV Ratio. 

Here's another one that I watch - the ratio of the Commodities to Bonds.  While Commodities outperform Bonds the stock market tends to rise.  And vice-versa.  This ratio tends to be a leading indicator.  Here's a weekly chart for the Ratio:

It needs to break below the dotted line to confirm a bearish move.

Here's another indicator of the health of the American economy - the Ratio of Coincident to Lagging Indicators:

You can see that this Ratio bottomed about the same time as the stock market bottomed at the end of the GFC.  That's a worrisome dip from the beginning of 2011.

Today should be up on the Australian market.  If it falls later in the day - that's probably a leading indicator for the overseas markets tonight.

Cheers

Red