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fib_1618

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US Equity Markets:

The NYSE composite A/D line continues to grind its way to new all time highs on a regular basis. With the NYSE composite U/D volume line now supporting a bullish configuration for the first time in 5 months (see cumulative charts), it should now be easier for prices to trend higher overall, and with it, a better than even chance that we'll now see a break above the April price highs during this current advancing sequence.



Having broken above the orange overhead resistance line last week, the NYSE common only A/D line has continued to show a choppy pattern of higher highs and higher lows in its effort to start playing catch up with the rest of the broader market. Next area of possible resistance lies with the May snapback highs, and upon a successful break above this level, a challenge of the all time highs would be next.



The NYSE preferred only A/D line continues to make new all time highs on a regular basis. Given the bullish underlying character of the market overall, a measuring objective off the symmetrical triangle is now noted for the New York Composite Index of just under the 8000 level.



US Interest Rates:

As the yield on the 10 year note continues to make new 21 month lows, the NYSE Bond CEF A/D line continues its upward trend of higher highs. However, it should be noted that this A/D line did not finish this week at new highs with the rest of the data charts. This could be an early waring sign that liquidity levels may be leveling off here, while at the same time, the talking heads believe that the FED is about to make another push of quantitative easing given the weak jobs numbers and upcoming mid term elections. Stay tuned.



US Real Estate:

After about 3 weeks of backing and filling, the NYSE REIT A/D Line is now showing leadership qualities to the upside in sympathy with the rest of the market. Due to the fact that the price pattern was able to hold a simple snapback to the orange breakout line during this process, any break above the orange overhead resistance line on this A/D line could provide a stronger than average thrust in prices as this pent up energy (sideways consolidation) of the last 4 months is finally released. We'll see.



Precious Metals:

With the price of spot gold continuing its amazing run to new all time highs, the Precious Metals A/D and XAU A/D lines have remained rather reserved in this process. As has been the case for many weeks now, the XAU basket of stocks continue to be the better performing group overall and so our concentration remains with them. Although a near term consolidation in the price of spot gold might be in the offering given that the XAU price index was turned away from its previous all time highs late last week, this might only turn out to be of a short term nature given this high rate of upward momentum.






Australia:

With the Reserve Bank of Australia keeping interest rates at 4.5% this past week, this should continue to keep the XAO A/D line from breaking above its accelerated declining tops line for the time being. However, prices in the XAO index remain constructive in spite of this, and after finishing its obligatory snapback to or towards its breakout line seen in purple, it could then move higher in sympathy with any global rallies that we might see over the next couple of weeks.



England:

The FTSE cumulative A/D line continues to consolidate at the highest levels seen in 3 years. Given that the US markets remain with a bullish bias, look for the eventual breakout of this consolidation to be to the upside, and with it, prices moving to around the 6000 level.



Germany:

Both the DAX cumulative A/D line and the DAX price pattern continue to go nowhere fast while it waits for its own clarity of direction. Watching the continuing behavior of the NASDAQ internals should provide the appropriate insight on which way it will likely to break. And with this continuing compression of pattern, which ever the direction that might be, it should turn out to be vigorous in scope.




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