Morning Coffee, Tuesday 19/4/2011

In America:

1. Dow Industrials -1.14% 
2. Dow Transports -1.38%
3. SP500 -1.11%
4. Russell 2000 -1.61%
5. Nasdaq100 -0.66%

Comment: S&P revised its long-term sovereign outlook for the U.S. to negative. Stocks didn't like that very much and tanked.  They recovered somewhat later in the day but the falls were still impressive.  The Nasdaq recovered the most of the major indices.  The S&P500 finished above the magic 1300 level - that's about half way down the big rise from mid-March.  1300 may be a line in the sand.  

Europe

1. France -2.35%
2. Germany -2.11%
3. London -2.1%

EWA (Australian Shares ETF traded on the New York Stock Exchange) -1.32%, in line with other falls on the American market.  The Australian Dollar was flat -0.48% to finish at 105.11.

Technical Comment on the American Market:

1. The Dow Industrials finished at 12201.6.  
2. The Index fell well below the 50-Day MA but climbed to finish just above it.  That's a positive.  
3. Indicators:
• Slow Stochastic 44.8 and flattening but needs to break back above signal line.
• Well below the 13-Day MA 
• RSI below its mid-line, now 47.6.  Negative
• MACD Histogram below Zero.  Negative
• CCI -54.  Probably needs to fall below -100 then rise before a recovery is assured.
4. Volume was high - given the recovery in the latter part of the day - that's a positive. 
5. Significant horizontal support in 12100 area.

The Index finished above the 50-Day MA which coincides currently with a medium term oblique uptrend support line.  That double support becomes important.

  

In the past 24-Hours Gold in Ozzie Dollars has risen over +1.26%.  That's a negative for our market

Clearly our market will gap down early today.  I wouldn't be surprised to see something of a recovery later in the day.  Last night, in Postprandials I suggested that our market wanted to go lower and would probably continue lower until oversold levels are reached on the major Indicators.  Let's see how low they get today.  They might tell us if we're getting close to a bottom on this run-down.  

Good luck

Redb