Dow down, Nasdaq up

q1010.pngThe stock indexes were mostly lower today, with the Nasdaq 100 the exception by moving a slightly higher. Volume was light once again. CCI reading are still holding above the bullish plus 100 level, momentum indicators are still point up, but some getting into overbought territory with potential bearish divergences ahead. However, there is no clear signal to abandon the long side yet. A reversal could occur quickly, so will monitor the three day pivot – which is the yellow dot on the chart, and the value for the next day is posted on the “Trends” page. The Nasdaq 100 held up much better than the Dow or S&P, as there was continued buying in goog, rimm, and many other tech names. Even Costco put in a nice performance today. The industrials were dragged down by Alcoa, which started off earnings season, and Boeing, among others. The Nasdaq/QQQQ still seems to be the best of the US broad indexes for this upmove. I will still look to the S&P or Dow for short trade, and will start posting those charts as trends change.
Above is the Baltic Dry Index. I posted a chart yesterday from another blog. If you missed that, check out the blog from yesterday. There is a link to a web site that plots this index along side other indexes such as gold and the fxi. I now have the data in my Tradestation software, so I can plot my own studies. It is interesting to see how dry shipping prices are so well correlated with the Chinese markets as well as many raw goods. It’s like the Dow Theory brought up to date, since the Chinese are driving much of the markets right now. The above chart shows quite a parabolic move. When prices become parabolic, such as in the above chart, you can usually expect a nasty retracement. Of course, part of this advance is due to the weakening dollar. With bearish sentiment against the dollar more one sided than I’ve ever seen any market in over thirty years of following markets, I wouldn’t be surprise if the low in the dollar is close at hand. If so, many of the recent bubbles could finally find the pin that pops them. It really feels to me like we are back in 1999, but this time the bubble is in China, and spilling over to the US market in companies that will benefit from the Chinese boom. I’ll will keep an eye on the shipping rates and post any changes here, and there will be an article in a couple of weeks on this index.
Not a whole lot to say about gold. There was a gap up. Then the market meandered most of the session to close a little under its open, but still up for the day, above the three day pivot (yellow dot), trends are still up, and momentum is up. The blue line on the two recent swing points are areas the market will need to test. More will be known when those test either fail or succeed.