It’s deja vu all over again – the S&P/ASX 200 fell slightly on the open, falling slightly below the June lows, before rebounding and is now steady just after midday at 4470 points.
Other Asian markets are all down, with the Nikkei 225 off 0.71% at 9903 points, and the Hang Seng down 0.28% at 21,743 points.
Other risk assets are mixed, with the AUD down slightly at 1.0623 against the USD, whilst gold steadies at $1603 USD an ounce. WTI crude is up slightly at $96.20 USD per barrel.
Movers and Shakers
It’s mixed across the board, and mixed within sectors. Amongst the banks all are losers (literally too), except NAB which is up 0.17% – the rest down 0.4 to 0.7%
BHP is down 0.44% whilst it’s twin RIO is down 0.21%. My preferred twins COH and CSL – continue to rise due to the weak AUD, up 0.75% and 1.19% respectively.
The big winners amongst ASX200 stocks include Murchison Metals (MMX) up 6%, and Western Areas (WSA) also up 6% – Telecom NZ (TEL) is also a standout, up just over 3%, whilst its slower, bigger, dumber Australian cousin Telstra (TLS) is up 1%
The biggest losers include Pacific Brands (PBG) down 4.5%, Paperlink (PPX) down 3% and Paladin down 2.5%
The daily chart shows this correction has screeched to a halt and is frantically trying to work out which way to go – note the “crosses” on the candles of the last 3 trading days.
Which way to go? Well, as I previously mentioned, if the ASX200 closes below support at 4450 (preferably for the week, not just one day) the next target is 4200 points. If it holds above this line, I would expect another impulse rally up to 4600 or so, but to hit significant resistance at 4700 points. My recent case study “A tale of two charts” still remains my high probability eventuality for this market, but I could be wrong.
This speculator has removed his tactical shorts from the market for now, but is strategically (i.e hedged) short. Long only investors should consider keeping their powder dry for the time being.