The S&P/ASX 200 Index closed up 10 points or 0.25% higher to 4258 points today. In after hours trading, the index is down a 13 points, with Euro and US markets pointing to mixed opens.
Asian markets had a mixed day, with Japan’s Nikkei 225 up slightly by 0.19% to 8479 points, the Hang Seng losing 0.55% to 18856 and the Shanghai Composite currently steady at 2466 points.
In other risk assets, the AUD was steady and is currently at 1.0099, whilst WTI crude slipped slightly after rising above $100 USD a barrel, now at $102.34 USD a barrel.
Gold slipped again, falling nearly half a percent during the Asian session and is currently at $1766 USD an ounce or $1748 AUD an ounce.
Movers and Shakers
An okay day on the board of the ASX, with only the material and telecomms (i.e Telstra) sectors putting on significant gains whilst industrials were slightly sold off, the remainder steady.
The banks were mixed, with ANZ up 0.5%, Commonwealth (CBA) down 1c, National Australia Bank (NAB) was down over 1% whilst Westpac (WBC) put on 1%
Macquarie (MQG) regained some of yesterday’s losses, whilst healthcare stalwart Cochlear (COH) rebounded by 2%. Its “twin” CSL had a pause in its uptrend whilst Telstra (TLS) put on 2 cents or 0.6%
BHP Billiton (BHP) rose over 1% alongside Rio Tinto (RIO) up 0.6% whilst gold miner Newcrest Mining (NCM) was steady.
Fortescue (FMG) is quietening down, putting on 1.9% for the day (instead of the normal 8-10% up, 6-7% down) alongside sold off Woodside Petroleum (WPL) which lost another 0.8%, in the face of rising oil prices…. Defensive stock Woolworths (WOW) regained all of yesterday’s losses.
The Charts
The market continues to track sideways – frustratingly – although short term traders are probably still long for now (ditto), as the bottom of the trend channel (green) and the medium term moving average are still quite intact.
However, overhead, the market continues to get sold off whenever it nears 4350 points – something I’ve repeated many times now – and is slowly moving towards the “congestion area” I’ve marked on the map.
Why is that are crucial? Because in the past, bear market rallies have failed and returned back to the predominant long term trend when the weekly price cannot close above the long term moving average. This usually occurs after a substantial rebound rally, of similar magnitude like the one we have seen.
For those who wish to follow the market one level above the daily noise, the weekly chart above shows the likely projection of a “Christmas rally”, albeit a bit slow it follows the weekly uptrend from the breach of resistance at 4100 points in early October.
Notably, the short term weekly trend – whilst still above the medium term trendline (marked in red) is pointing down. The market is refusing to close, on a weekly basis, any higher.
What about one more level higher? (probably relevant for super fund trustees)
The monthly chart above (click for full size) shows the downtrend from the May 2011 high is intact and moreover, how the support level from the May 2010 low is now acting as resistance, with the real support level at 3800 points.
This could equate to a ranging market between 3800 (a very low valuation indeed) and 4300 points (a normal valuation of approx. 11 times earnings) until macro settings improve significantly.