Trading Day – 17th May

The S&P/ASX 200 is steady this afternoon, pausing in the second leg of a correction that began in early April (down over 7% or 300 points). Asian markets are also down, the Nikkei down 0.44%, the Hang Seng 0.45% and Singapore 0.86%. The AUD is up slightly to 1.0562 against the USD, whilst gold is steady at $1493 USD per ounce and WTI oil at $97 USD per barrel.

The lead from overseas markets – where the Dow fell slightly, but the broader S&P500 and NASDAQ fell sharply (1.5% plus) – has not translated into similar falls. However, the drop below the critical 4700 support level means the next target zone is around 4500 points – or a 10% correction from the April highs.

The pattern on the weekly charts remains similar to the May 2010 correction. A double top formation after hitting resistance at 5000 points – any further weakness of overseas markets could see an overshoot of the correction to 4200 points.

Daily candlestick chart with 15 day moving average

Comments

  1. Righto, looks like deflation not inflation to me, but i don’t work for the RBA.

    Meanwhile we can all feel the mining boom and subsequent wealth-effect.

  2. The Real Dank Castle

    Ahhh, the boom gives off a nice warm feeling. Oh wait, that’s urine, and we’re being pissed on!