Trading Day

The S&P/ASX 200 climbed through midday before wiping out all gains and then some, closing today down 19 points or 0.486% to 4082 points.

Asian markets experienced broader losses, with the Nikkei 225 closing down 1.04% at 8628 points, and the Hang Seng down 1.37% at 19133 points.

In other risk assets, the AUD slipped 0.22% against the USD, at $1.0383, WTI crude down 1% to $81.44 USD per barrel. Gold is up 2%, trading at $1888 USD an ounce.

Movers and Shakers
It’s mixed across the board, but generally red, with the telco and consumer sectors falling the strongest. The banks closed the day down, with WBC leading the way, down 1.48% whilst CBA was the best, only losing 0.13%
The resource twins BHP and RIO have diverged for the day, but are still the main drivers of the index up 0.05% and down 1.2% respectively.

Billabong (BBG) continues to fall, down nearly 8%, whilst Fairfax (FXJ) had a horror day, down over 6% – small miners lead the charge on the positive side, but were few and far between.

Daily Chart
The daily chart shows how recent price action – the dead cat bounce of last week – has slipped below tenuous support at 4250 points, with the next target at 4000 points.

Daily candlestick chart of ASX200 for six months

Moving to the weekly chart, the resistance levels are clearer: medium term structural at 4500 points (the target for any sustained rebound rally), and secular resistance at 5000 points (the target to exceed to reverse this bear market).

Weekly chart of ASX200

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Comments

  1. Good analysis as usual Prince. The 3740 line is unexplained. Is that a less likely scenario? Could this be a mini version of Oct 2008 – Mar 2009 bear run, in terms of scale and duration? If so, we’re about 50% to the bottom (of 3200?) from the May peak.

    • Oops you caught me out there Jack – its the main distribution or support/resistance line from the March 2009 lows from the November 2008 break.

      That is, it was the line of resistance to break that the crack up rally from March 2009 had to exceed.

      3000 was a similar distribution/S&R line during the last sideways market and subsequent reversal, from 1999 to 2003.