Sat. 27/11/21.  Covid's new mutation crashes markets.

A new variant of the Covid virus has emerged in Southern Africa which caused WHO to give it a new designation "Omicron".  WHO first described the "Omicron" as a "variant of concern" and said that it could spread more quickly than previous variants.

That was enough to put the bejesus into markets starting with Australia (XJO -1.73%) and Japan (Nikkei -2.25%).  Fear then rolled around the globe.  Markets in Europe fell heavily, (German Dax -4.15%, UK FTSE -3,64%) and America followed suit (Dow Jones -2.53%, Nasdaq -2.23%).  Even more dramatic were falls in commodities.  US Oil, for example, fell -13% on fears that countries would lock-down again reducing demand dramatically.

U.S. Markets overnight:

Dow Jones -2.53%.  SP500 -2.27%.  Nasdaq -2.23%.  Small Caps -3.72%.  Banks -4.19%.

Safe Haven trading:

Traditional safe havens benefitted from the rampant fear.  20-Year Treasuries rose sharply (TLT +2.53%), Japanese Yen looked good against the US dollar.  At one stage in early trading on Friday, USD/JPY was down -1.48%, i.e., Yen up against US$.

Commodities:

Commodities Index -5.96%.  Energy -9.6%.  Base Metals -3.74%.  Gold -0.16%.

Eerie Predictor:

On Wednesday evening I showed the graph of the Australian Cumulative Advances-Declines which showed a dramatic collapse in the Cum A-D.  I've said previously that this is probably the best leading indicator for a fall in the market.  Two days later, CRASH!

Here's the up-dated chart as of Friday p.m.:

I'll give a more comprehensive up-date on the Australian market tomorrow in Sunday's Weekly Wrap.

 Fri. a.m. 26/11/21.  American markets closed.  European markets firmer.

Overnight:

German Dax +0.3%.  UK FTSE +0.3%.  European STOXX600 +0.4%.

Commodities:

US Nymex Crude Oil -0.5%, Iron Ore -3.2%, Copper flat -0.0%.

Overnight Oz Futures -0.1%.

In London trading, BHP -0.3%, that compares to yesterday's result in Australia of +0.99%.  RIO -1.1% compared to yesterday's +1.64%.

We'll probably see more choppy trading today which has characterised the past two days.

 Thu. p.m. 25/11/21.  XJO finished a little higher today, once more in choppy trade.

The XJO continues to sidle sideways in a directionless trend.  That is unlikely to change tomorrow as the American markets are closed for Thanksgiving.

Today, NewHighs-NewLows broke a two-day streak of negative readings, but the Cumulative NH-NL remains precarious.

Advances-Declines was again negative.  That's now a five-day losing streak.

XXJ (Financials) was the big drag on the market today, down -0.9%.

XXJ is in a medium-term bearish trend.  Positive divergence on the CCI suggests we could see a counter-trend rally in the near future.

Thu. a.m. 25/11/21.  Mixed results in U.S. stocks, with T-Note yield falling.

Overnight:

Dow Jones -0.03%.  SP500 +23%.  Nasdaq +0.44%.  Small Caps +-0.24%.  Banks -0.19%.

SP500:

SP500 was up modestly and at the top of its trading range.   American market is closed for Thanksgiving on Thursday evening Oz time.

Commodities:

Commodities Index -0.37%.  Energy -0.44%.  Base Metals +1.26%.  Gold -0.1%.  Iron Ore +4%.

Overnight Oz Futures +0.1%.

Australia's ASX200 was down a little yesterday -0.15%%.  Expect more of the same today.  We'll probably see the miners up while banks will be down.

Wed. p.m. 24/11/21.  XJO on the negative side today in choppy trading. 

XJO finished down today -0.15%.  Today's candle shows a narrow body with upper and lower wicks - a sign of choppy trading.  XJO currently lies in the middle of its trading range.  This can go either way.

Breadth readings are suggesting that the market internals are setting up for a downside move.  Here's the Cumulative Advances-Declines chart:

The Cumulative Advances-Declines chart is collapsing.  That often results in the XJO following suit.

To add to the problems with the internals, NewHighs-NewLows have been negative today and yesterday.  That's an unusual event.  The Cumulative NH-NL hasn't yet crossed below its 10-Day Moving Average, but it isn't far off.

A break by the NH-HL CUM below its 10-Day MA would be a significant event.

The XJO remains in its trading range.  But weakness in Energy, Materials and the Banks would easily catapult the market into a bearish trend.

 Wed. a.m. 24/11/21.  Mixed results in U.S. stocks, with 10 Yr yield rising.

Overnight:

The effects of Biden's decision to re-appoint Powell as Federal Reserve Chair continued to be felt in the American market.  The yield on 10-Year Treasuries went up, so Tech stocks went down and Banks went up.  We'll see a similar effect in our market today.  Our Tech stocks were hit hard yesterday, with ATEC (the ETF tracking the Information Technology sector) down -3%, while MVB (ETF tracking the Banking industry group) went up +0.85%.

Dow Jones +0.55%.  SP500 +0.17%.  Nasdaq -0.5%.  Small Caps +0.03%.  Banks +1.57%.

SP500:

SP500 fell in the first hour of trading, then slowly pegged back the losses to finish on the positive side.  That suggests that the Powell-effect may have disappeared from traders' minds after the first hour and is now becoming a distant memory.  

The long lower wick on today's candle indicates the extent of the intra-day buying and suggests we'll see follow-through in the next session.  Enough to break above overhead resistance?  We'll have to wait and see.  Thursday - the market is closed for Thanksgiving.  Friday's action might be guided by confidence in the buying on "Black Friday" specials.

Commodities:

Commodities Index +1.81% rose strongly buoyed by improving Energy prices, +3.51%.  Base Metals down -0.65%.  Gold continued to suffer from the Powell-effect, down -0.87%.  Gold saw some intra-day nibbling as it fell down to support of the 50-Day MA.  It might stabilise around this level which is opposite a big congestion zone.

Iron Ore +5%.

Overnight Oz Futures +0.0%.

Australia's ASX200 was up strongly yesterday +0.78%.  Overnight Futures suggest the ASX200 will consolidate today around yesterday's close.   That seems a bit odd given the overnight results, but maybe our market pre-empted those in yesterday's rise.

 Tue. p.m. 23/11/21.  XJO has big upside move, but, nothing changed.

XJO up today +0.78%.

Today was a bullish engulfing candle.  That's promising. But the index remains locked in its trading range.  Until we break out of that trading range, this is a market for day-traders.