The S&P/ASX 200 Index closed up 52 points or 1.2% higher to 4296 points today, after a sideways morning session followed by strong bids in the afternoon. In after hours trading, the index has fallen 10 points, with Euro and US markets are pointing to modestly higher opens.
Asian markets had a mixed but generally good day, with Japan’s Nikkei 225 up 0.4% to 8535 points, the Hang Seng gaining just over 1% to 19175 and the Shanghai Composite currently up 0.5% to 2493 points.
In other risk assets, the AUD slipped slightly to 1.015 against the USD whilst WTI crude gained 0.4% to $98.19 USD a barrel.
Gold gained 0.5% during the Asian session after a tumultuous session overnight and is currently at $1767 USD an ounce or $1741 AUD an ounce.
Movers and Shakers
A green day on the board of the ASX, with all sectors putting on points, with industrials, healthcare and real estate standouts.
The banks were all bid up, trying to recover the broad losses of yesterday, with ANZ up 0.8%, Commonwealth (CBA) up 1.5%, National Australia Bank (NAB) steady, Westpac (WBC) gained nearly one percent.
Macquarie (MQG) put on 1.6%, whilst healthcare stalwart Cochlear (COH) was bid up very strongly, nearly 4%. Its “twin” CSL also continued to make gains, up 1.4% whilst Telstra (TLS) put on one percent.
BHP Billiton (BHP) was up 0.8%, Rio Tinto (RIO) 0.7%, gold miner Newcrest Mining (NCM) up 1.3%, Fortescue (FMG) up “only” 2.7% and Woodside Petroleum (WPL) also did well, putting on 1.5%
Woolworths (WOW) regained its losses of yesterday and was bid up nearly 1.5%.
The Charts
The ASX200 is in the middle of a ranging channel and continues to fight with the 4300 resistance line in an aggravatingly volatile market.
The weekly chart below shows the market still gravitating above the previous downtrend line, and returning to its uptrend (marked in green) from the September lows:
I continue to caution that this is a typical bear market rally that has a low probability of morphing into a cyclical bull market. The market must clear the area of approx. 4450 points to do so and could continue to track sideways for sometime yet before a clear breakout – either way – eventuates.
Tread carefully and assign your asset allocation based on the risks.
Watch my “Chart of the Day” posts for continued analysis of US, Euro and Asian markets which will lead the way.