The Brains Trust-2019, page-207

On a morning like this, where does a Simple Little Chartist start when trying to analyse markets!!!

I was looking for the S&P to have another move higher which it has obviously done breaking out of the sideways move of the past two weeks. It is clear that the Fed’s “patience” has really struck a chord with investors. Now it is a question of how far the S&P can move. I think the resistance above 2700 is going to be really tough. I would have felt a lot happier about being able to give higher target on the S&P if the banks/finance section of the US could have also broken topside out of the recent sideways action which they have clearly not done even with this latest outbreak of enthusiasm. Even the RUT is still caught in the sideways action of the past fortnight.

The weakness of the US dollar also played a huge part in the overnight excitement and has left the Aussie dollar stronger as well as the yuan. After easing back in offshore trading, gold shot above yesterday’s high on the results of the FOMC meeting. I am more than happy to see gold higher as longer term I do believe we will see levels that will surprise many people, but short term I think it is going to meet quite a bit of resistance from trading in late 2017/early 2018 in the range of 1320/1350. Eventually, yes, it will get through this resistance, but I just don’t think it will do it in one sharp move up. But maybe, this market is even stronger than I thought.

Our XJO has been caught in a similar sideways action to the S&P. The weakness of the banks has been offset by the major miners with RIO reaching stardom status as iron ore miners were advantaged by the horrid disaster last week when a tailings dam collapsed. Hopefully the overnight strength will stretch into our time zone because what really has me interested this morning is that I think the banks look like they want to do a bit of a catch up. Sounds ridiculous when we have the report from the Royal Commission this weekend so maybe the market has discounted the result. Maybe it isn’t as bad as some investors fear. I do find it a bit hard to believe.