February 12, 2005
The Dow Industrial Average staged a brief correction, starting with consolidation at  and ending with a downswing at . This quickly expired, with a strong blue candle on Thursday and further gains on Friday . The tall shadow at  forewarns of further resistance at 10850 to 10860. Expect some consolidation at this level before an attempted breakout. A close above 10860 will be a strong bull signal. A fall below the low of  would signal an intermediate reversal and a re-test of support at 10350.
Twiggs Money Flow (21-day) has crossed above the zero line, signaling accumulation. It is too early to call this a recovery but watch for further signs in the week ahead.
Watch for Twiggs Money Flow (21-day) to cross above the zero line.
Twiggs Money Flow has formed a trough [B+] above the zero line: a bullish sign.
Market fears of a steep rates rise appear to have eased and the yield on 10-year treasury notes completed another test of support at 4.00%. Yields appear soft and a fall below 4.0% would be bearish for equities.
The yield differential (10-year T-notes minus 13-week T-bills) continues to fall, reaching 1.60% this week. Below 1.0% would be a (long-term) bear signal for equity markets.
New York: Spot gold has rallied to test resistance at the base of the recent consolidation, closing up at $420.40 on Friday.
A successful test will signal that a fall to $400 (and possibly the 1-year low of $375) can be expected.
Reversal back above $420 would signal that the (intermediate) down-trend has slowed and further consolidation is likely.
The bull rally on the All Ordinaries continues. After a brief consolidation, towards the end of last week, the index rallied strongly on Monday at . The modest correction that follows, ending with declining volume and a long tail at , indicates that the (intermediate) up-trend is likely to continue. Though Friday's weak close warns that selling pressure has not completely dissipated.
A rise above Friday's high would signal trend continuation, while a fall below support at 4150 would signal that the trend has reversed.
The primary trend still appears strong but we need to bear in mind that at some point there is likely to be a correction back to 3450. This is based on observation of the All Ords over the past 25 years, where the index has regularly tested support at previous highs in an up-trend.
As your desire is, so is your will.
As your will is, so is your deed.
As your deed is, so is your destiny.
~ Brihadaranyaka Upanishad IV.4.5