Morning Coffee, Saturday 16/4/2011

In America:

1. Dow Industrials +0.46% 
2. Dow Transports +0.66%
3. SP500 +0.39%
4. Russell 2000 +0.91%
5. Nasdaq100 -0.16%

Comment: Industrials and SP500 up solidly.  Nasdaq down a little.  That divergence is a worry.  Breadth was good (Russell 2000) and Transports were also good.  

Europe

1. France +0.1%
2. Germany +0.44%
3. London +0.54%

EWA (Australian Shares ETF traded on the New York Stock Exchange) -0.48%, reflecting the fall in Australia during the day on Friday.  The Australian Dollar was flat +0.19% to finish at 105.62.

Technical Comment on the American Market:

1. Three day candle pattern on the SP500 looks promising Today's close was 1319.68.  
2. The 50-Day MA is currently providing support.  That's a positive.  
3. Indicators:
• Slow Stochastic below 80 (now 37.3 and kicking up - improving but needs to break back above signal line)
• Break below the 13-Day MA (condition met)
• RSI below its mid-line (now 52 - break back above 50 is promising)
• MACD Histogram below Zero (now -1.15 and flat, neutral?)
• CCI below 100 (rising from -28.1 to -1.5, promising)
4. Volume was higher than the previous two days - showing strength.  
5. Significant horizontal support in 1300 area.

The chart is complicated with several countervailing forces in play.  

• long-term up trend
• medium term down trend
• short term up trend may be breaking back to the upside - needs to regain the 13-Day MA (at least) to confirm

Despite disappointing earnings results so far from Alcoa, Morgan Stanley and Google, the market hasn't tanked.  That's a plus.  The waning of concern about Libya (and the Middle East in general) and Japan has probably resulted in a paradoxically resilient market in the wake of those earnings reports. 

  

In the past 24-Hours Gold in Ozzie Dollars has risen over 0.48%.  I usually take a rising Ozzie Gold price as negative for our market but given a stronger Ozzie Dollar it may be a plus.

The "blogosfear" is rife with concerns about the ending of QE2.  Spectres talked about endlessly rarely are as fearsome as the talk suggests.  As I tell my grand-children, monsters and ghosts don't exist.  I always take the view that talk is talk - and if there's some substance in the talk then it will show up in the way the markets are behaving - so watch the markets - don't listen to the talk.

Good luck

Redb