Sunday Summary, Week ended 1/4/2011

TRENDS:

- XJO: monthly chart -   Still above the 10-Month MA.  Positive.  In a very long term sideways

consolidation.  (This is the only chart as a long term investor I need to look at.)

- XJO:  weekly chart -  medium term trend broken to the down side.  May be reverting to the upside. 

- XJO:  daily chart - up.  Overbought and at major resistance. 

- Dow Industrials:  short-term up.  Overbought and at major resistance

- Small Ordinaries: short-term up.  Overbought.

- Ozzie Dollar:  Broke out to multi-year highs.  Positive for the Australian stock market.

- Gold in Oz Dollars:  short-term trend - down.  Now at support.

XJO currently at 4862.

Major Support and Resistance for XJO: Resistance:  5000; Support 4200 .  Mid-point 4600.

Copper in the medium term has turned down.  That’s negative for the markets

Any correction is likely to be muted because of Bernanke’s money supply (QE2) and the strength of the Presidential Cycle in the 3rd Year. 

Next Week:  Geo-political events (oil price) will continue to have an impact on general market sentiment.  Oil Price (West Texas) currently rising and close to 110. 

My Game Plan:  

-  Wait and see.  Probably unwise to add to positions at this stage.

-  Most likely scenario is a short term pull-back and further rises.

-  Short-term the market is overbought.   Caution.

Good luck

Red