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.

The aftermath of financial crisis.

The Asian financial crisis of 10 years ago(1997-1998) has taught a bitter lesson.
The western economists concluded that emerging economies should adopt flexible exchange rates and modern, well-regulated and competitive financial markets. The Asians decided to choose competitive exchange rates, export-led growth and huge accumulations of foreign currency reserves.
When downward pressure on the Thai baht started 10 years ago, nobody expected what followed - its devaluation in early July. That seemingly small event generated a financial tsunami that engulfed most of east Asia and overwhelmed Indonesia, Malaysia, the Philippines, South Korea and Thailand. Exchange rates collapsed, financial systems went bankrupt, governments teetered on the edge of default and economies succumbed to deep recessions. Officials from the International Monetary Fund raced from one crisis-hit country to the next. In its last movements, the crisis went global, overwhelming Russia in August 1998 and Brazil in early 1999.
As surprising as the onset of the Asian crisis has been its aftermath. With the important, but geographically limited, exceptions of Argentina and Turkey in 2001, the crises of 1997-98 have so far been the last in the long series of financial crises that afflicted emerging economies in the 1980s and 1990s.
Today, the desire of outside investors to put their money in these economies is overwhelming, as is shown in the strength of their financial markets, the low spreads on external borrowing and the size of the private capital inflow.
Now the east Asian emerging economies are mostly creditor nations. Moreover, much of their accumulation of external assets is in official hands.The scale of the reserve accumulation demonstrates the obvious: these countries have refused to adopt the freely floating exchange rates many outside economists recommended.
The US has emerged as the world's chief deficit country - its "borrower of last resort". It alone is able to be a vast net borrower without risking the health of its financial system.

Tracking the Dow,01/10/09.(11 market days Dow Futures Expiry)

Nikkei Futures Expiry:(6 maket days)
9:30am:--Bearish unshaven open.

Initial jobless claims for the week ending September 26 totaled 551,000, which is more than the 535,000 claims.

10:30am:--Hoovering at session bear pivot with hangman.

Personal income for August increased 0.2%, which is a bit better than the 0.1% increase that had been widely expected.

11:30am:--Session low with indecision doji.

The International Monetary Fund forecast that the world economy would expand 3.1% next year.

12:30noon:--Bearish harami at near morning low.

Personal income for August increased 0.2%, which is a bit better than the 0.1% increase that had been widely expected.Spending was up 1.3% in August.

1:30pm:--Hitting another low with mild rebound,hangman again.

The ISM Manufacturing Index for September came in at 52.6. That is below the consensus estimate of 54.0 and below the August reading of 52.9.

2:30pm:--Bearish engulfing.

Fed Chairman Bernanke spoke before the House Committee on Financial Services.

3:30pm:--Bearish shooting star at near day's low.

Fed Chairman Bernanke lent support to the U.S. dollar this session by stating that it is at no immediate risk.

4:00pm:--Three black Crows with a bearish spin ending the day.

A possible weak follow through.
The Dow is being shaken by the earthquake in Padang,Sumatera and the tsunami in the Pacific Island of American Samoa.

A follow through undercurrent will be weak aftershock before it finds its feet again,normally takes three bearish day.(San-ten)

The 52 weeks bull support at 9,303.84 points is vital for its survival and it's quite close.

An opportunity to open position for the Dow's revival.