The S&P/ASX 200 Index closed up 8 points or 0.2% higher to 4304 points today, after jumping in the morning session on reaction to the solid gains on EU and US markets on Friday night. In after hours trading, the index is slipping, with Euro and US markets pointing to slightly higher opens.
Asian markets had a better day, with Japan’s Nikkei 225 up 1% to 5603 points, the Hang Seng gaining just over 2% to 19536 and the Shanghai Composite currently up 1.8% to 2525 points.
In other risk assets, the AUD is up slightly to 1.0292 against the USD whilst WTI crude was steady at $99.12 USD a barrel.
Gold gained 0.3% during the Asian session but is still struggling to crack $1800 an ounce, and is currently at $1793 USD an ounce or $1739 AUD an ounce.
Movers and Shakers
A fairly green day on the board of the ASX, with most sectors up, industrials the standout up 1.3%, whilst the IT sector was down 0.7%
The banks were mixed as the market reacted to the slender finance numbers, with ANZ down 0.2%, Commonwealth (CBA) up 0.5%, National Australia Bank (NAB) and Westpac (WBC) steady.
Macquarie (MQG) put on 1.3%, whilst healthcare stalwart Cochlear (COH) was bid up very strongly intraday, breaking through $56 per share, but finished at $54.70, or up nearly 0.4%. Its “twin” CSL also continued to make gains, up 0.4% whilst Telstra (TLS) put on 0.3%.
BHP Billiton (BHP) fell 0.8%, Rio Tinto (RIO) also lost and finished down over 1% whilst gold miner Newcrest Mining (NCM) was up 0.8%. Fortescue (FMG) was very quiet – only up “only” 1% alongside Woodside Petroleum (WPL) also up nearly 1%, whilst Woolworths (WOW) slipped 0.3%
The Charts
The ASX200 continues in the middle of a ranging channel whilst running headlong into the 4300 resistance line.
This short term 3 month daily chart also shows some intraday bearish signals being repeated:
Notice that the late October sell-off – the most recent attempt to breach 4350 points – had a long “wick” or upper shadow, representing dominant selling during the day’s trading. This has been repeated today.
The short term uptrend – shown by the green line is temporary support, with a breach below (approx 4200 points) in the next few days being bearish, with a target at 3850 points.
I must 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.