A tremendous 24 hours in risk markets around the world as they reacted to the combined liquidity of the world’s biggest central banks. The S&P/ASX 200 Index, jumped over 2% at the open this morning, finishing 2.6% or 108 points higher to 4228 points. Since this has busted through resistance at 4150, the support level for the rebound rally throughout October and most of November, a rally to 4300-4400 points is feasible, following other “undollar” assets around the world.
In after hours trading, the Australian SPI futures have deteriorated slightly and are trading at 4210 points.
The US markets, after reacting to the European bourses, all finished 4% or more higher last night with the S&P500 finishing up 4.3% to 1246 points.
In Europe, the markets were similar with the UK FTSE up 4.3% to 2330 points and the German DAX up almost 5% to 6088 points and is only 260 points or 4% below its October high. The Great Volatility continues…
Not as strong as equities, the Euro (EUR/USD) however seems to be forming a double bottom reversal, slowly rising above support at just above 1.32, currently trading at 1.3463
The key index to watch, as always, is the USD Index , which appears to have formed a double top reversal, breaking its short term uptrend (marked in green) and heading for support at 76 points. The undollar rally effectively has this potential from the one-off liquidity granted from the Fed.
Asian markets had a great day, Japan’s Nikkei 225 was up 2.1% at 8616 points, the volatile Hang Seng shooting up almost 6% or over 1000 points to 19041 points and the Shanghai Composite currently up 3.2% or 76 points to 2408 points reversing yesterday’s losses.
The AUD was bid up strongly overnight, continuining its proxy as the commodity currency today, back above parity and is currently at 102.34 cents. WTI crude climbed above $100 a barrel again and is now at $100.61 USD a barrel
Gold was steady during the Asian session, but in the last 24 hours has traded in a $50 range, now at $1746 USD an ounce, likely on its way to resistance at $1800 USD per ounce. In Australian dollars however, gold fell and is now at $1708 AUD an ounce.
Movers and Shakers
Well the unicorns were taking viagra today (or maybe LSD) as almost everything was bid up – and strong! The usual suspects got most of the action – materials up nearly 4% (i.e BHP and RIO), financials up 2.4 and 2.9% and energy sector up 2.5%
The banks were all bid up 2 to 3%, with ANZ up 3%, Commonwealth (CBA) up 2.5%, National Australia Bank (NAB) up 3.2% whilst Westpac (WBC) put on 2.7%
Notably, CBA is on its way to resistance at $50 per share, just above the long term moving average.
Macquarie (MQG) also took part in the financials rally, bid up over 5% to be above $24 a share again although it remains in a dominant long term downtrend, whilst healthcare standout Cochlear (COH) jumped over 3% to $57.40 a share, approaching significant resistance at $60 per share:
Its “twin” CSL rose 1.5% whilst Telstra (TLS) was bid up only slightly compared to the rest of the market, again on low volume. Something to keep an eye on.
To the holes in the economy (sic), and the bruising bullying big brothers of the bourse – BHP Billiton (BHP) effectively pushed the market up by jumping over 4% from very low levels, alongside its “twin” Rio Tinto (RIO) up nearly 5%, speculators and investors (but I repeat myself) reacting to the USD liquidity that is supposed to drive risk assets up worldwide.
As a trader on Twitter I follow put it: from “Yes We Can” to “Kick the Can”.
Anyway, back to the stocks and gold miner Newcrest Mining (NCM) jumped 3% but remains rangebound in a sideways pattern since the October falls, with resistance at $37 a share:
Fortescue (FMG) was bid up almost 6%, and rounding out the ASX8, Woodside Petroleum (WPL) followed the market, and was up 2.2% but also remains at depressed levels, whilst crude oil prices are at a high, suggesting limited upside?