Trading Day: Friday 17th June

The S&P/ASX 200 rebounded on the open from positive leads from the US overnight, but has since reversed back below 4500 points just after midday. The index is up 7 points or 0.17% to 4486.

Asian markets are similarly effected, with the Nikkei down slightly, the Hang Seng down 0.18% and Singapore 0.14%.

Other risk assets are mixed, the AUD is still above 1.05 against the USD, gold up slightly to $1529 USD an ounce. WTI crude is at $95.13 USD per barrel.

Movers and Shakers
It’s mixed across the board. CBA, NAB and WBC are up 0.75%, 0.5% and 0.4% respectively, but ANZ is down 0.23%
BHP is up a third of a percent to just over $42 per share, but RIO is down again, losing 0.3% to $78.17 per share.

In other ASX200 stocks, there’s been some large gains on the rebound with Gunns (GNS) up almost 8% and Nexus (NXS) also up 7%. Woodside (WPL) is down almost 4%, whilst OZ Minerals (OZL) is down 2.3%.

ASX200 still below critical support at 4500 points
The market is still teetering below the Japanese earthquake lows at just below 4500 points – what this week’s close brings in will support market direction for the rest of the financial year (and calendar year probably).

A sustained break below this level will extend the correction, with the next target at 4200 points – the lows in the May flash crash of 2010.

Daily Chart
The daily chart shows how the current price activity has broken below the low point of the Japanese/MENA lows of March. This break of support is very bearish in the short term.

Daily chart of ASX200 - correction continues

Weekly Chart
For today’s chart, I’m leaning on The Avid Chartist, who pointed out the weekly trendline from the post-March 2009 low (which was an overshoot) to now has broken. Three consecutive weeks below this point is extremely bearish and adds weight to the probability that prices will continue to fall to the next support level at 4200 points.

Weekly chart of ASX200 - note post March 2009 trend is broken

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