Morning Coffee. Friday, 8 April, 2011

In America:

1. Dow Industrials -0.14% 
2. Dow Transports -0.51%
3. SP500 -0.15%
4. Russell 2000 -0.55%
5. Nasdaq100 +0.02%

Comment: The behemoths of the market (Dow Industrials, SP500, Nasdaq100) were relatively flat with small losses in the first two.  Those three indices were well down in the early part of trade but recovered later in the day.  (See the relatively long tail on today's candle.)  The more sensitive issues (Russell 2000 and Dow Transports) were weak.  That divergence is a cautionary flag.  

Europe

1. France -0.49%
2. Germany -0.5%
3. London -0.56%

Losses in Europe mirrored the losses in the large caps in America in early trading.

EWA (Australian Shares ETF traded on the New York Stock Exchange) -0.07%.  The performance of the EWA was helped by a modestly stronger Australian dollar which closed at 104.69, up +0.27%.

Technical Comment on the American Market:

1. SP500 is still below the February closing high of 1343.  Today's close was 1333.5.
2. RSI at 60.3 has turned down from recent highs.  A break lower below 60 would be a caution.
3. Stochastic is overbought and now below its signal line but still above 80.  Caution
4. MACD Histogram is dropping but still above zero. Caution
5. Significant oblique resistance line has halted strong advance.
6. Today's candle was the forth "doji" candle in a row.  Volume was a little lower today than the previous two days - slackening of demand mirrored by the small drops in the major indices.  Another day of indecision.   
7. Significant support in 1300 area.
8. Force Index is below Zero and below its support line.  Negative

Bears had an edge today but not decisively.  Action in the Transports, small caps and the Force Index suggest more pullback ahead.

In the past 24-Hours Gold in Ozzie Dollars has fallen -0.37% (due to that strong Ozzie Dollar).  That's a plus for our market today.

Our market closed slightly on the negative side yesterday, once again we'll struggle to gain traction.  If we're down solidly, then this rally is probably over.  But - let's wait and see how today plays out.  Rising interest rates in Europe, more trembles and economic disruption in Japan, debt woes in Portugal, continuing tensions and fighting in the Middle East/North Africa, oil over $110 barrell - none of that adds up to a context engendering confidence.    

Good luck

Red