Trading Day

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The S&P/ASX 200 closed steady today, up only 6 points or 0.1% to 4269 after rallying in the morning to over 4300 points.

Asian markets experienced more positive gains, with the Nikkei 225 closing 1.1% higher at 8953 points on the back of bad employment and retail sales numbers whilst the Hang Seng closed up 1.35% to 20133 points.

In other risk assets, the AUD is steady at 1.066 against the USD, whilst WTI crude gained slightly to $87.39 USD per barrel. Gold is also steady after falling overnight and is just below $1800 USD an ounce.

Movers and Shakers
It’s mixed across the board on the ASX, dragged down by the telco sector (down 2.5% mainly due to Telstra). Volatility is cooling off as the earnings season draws to a close, but small financial planning firm Count Financial (COU) jumped over 30% on takeover bid from CBA, looking to shore up its wealth management business.

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The banks were mixed, with ANZ and CBA closing slightly down whilst Westpac (WBC) gained 0.29% and NAB the best up nearly 1% – Macquarie (MQG) posted a good day, up 3%

BHP Billiton (BHP) closed the day up 0.5%, whilst RIO continued to rally, up 1.67%. Woolworths (WOW) retreated over 1% after posting some gains earlier in the day.

The Charts
As I mentioned previously, in the short term, there is strong resistance at 4300 points – the high reached during the rebound rally from the epic correction of early August. The market touched and failed to breach this level today. A repeat of this failure will shake out the rest of the bulls and let the bears add more shorts, likely sending the market back down to strong support at 4100 points.

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Daily chart of ASX200 - click to enlarge

The weekly chart is more revealing – note the support at 4100 points, now tested for four weeks in a row, with target resistance of 4500 points. The Index is building on strong levels of support but a quick glance to the left shows a similar pattern during the post-Greece Crisis (Mk1) of May last year.

Weekly chart of ASX200 - click to enlarge

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The 260 day weighted moving average (pink) line is trending down, and turning over sharper than last year’s sideways funk – its still a bear market, although a rally up to 4500 points (the intermediate resistance level of late June/early July) is conceivable and completely normal in the context of a bear market rally.