Australia's interest rate increase.

The Reserve Bank of Australia yesterday became the first Western central bank to lift interest rates since the onset of the financial crisis, surprising economists with a quarter of a percentage point increase in the cost of borrowing. The first G20 group of leading nations to do so.

The central bank's move, which had not been expected so early, may ignite suspicions that other countries will soon tighten monetary policy. The fact that Australia is the first to make the move is not a surprise. It narrowly managed to avoid recession, despite seeing its economy contracting in the final quarter of 2008, and has been buoyed by exports of commodities to China. Indeed, the country was the only one in the developed world to expand in the first half of the year.

Tracking the Dow:Tuesday06/10/09.(12 market days to index futures expiry)
Nikkei 225 index futures expire 09/10/09

9:30am:--Hefty 70.0 points gap up with unshaven bottom.

A weak dollar and news that Australia raised its rates last night are giving a boost to some of the commodity complex.

10:30am:No sign of pullback to fill up opening gap no at session high.

Advances throughout Europe were impressively spreading into the Dow.

11:30am:--The morning high checked by darkclouds cover.

Banks operating in the UK will be required to hold some 1 billion pounds in government securities to ensure that they have enough liquidity in times of financial stress.

12:30noon:--Shooting star identified.

There weren't any economic releases this session and only a handful of companies made announcements ahead of earnings season's start tomorrow night.

1:30pm:--Pullback hoovering at bull support with bearish inverted hammer.

Commodities were helped considerably by the dollar's decline.
2:30pm:--Another pullback this time to day's MAV support with bullish engulfing.

3:30pm:--Touches the bull pivot which is now the resistance being hit by a graveyard doji.

4:00pm:--Bullish close for a spillover.

The "dragonfly doji" formation as at today is yet another reprieve for the bulls.The bulls were still lagging as the bears lower shadow were more powerful.The chances of forming an upper white candlestick body is very promising in view of the ample time prior to the Dow indx futures expiry.

Tuesday's candlestick is piercing through the weekly bull resistance so there's no more fear of a tremendous pullback.It has already find its early low at the start of October.