The S&P/ASX 200 Index gained further today, climbing 1.4% or 58 points higher to 4288 points after a late surge in the afternoon session:
The local bourse seems on its way to 4350 points, the resistance level it was unable to breach throughout all of October as it follows other “undollar” assets around the world as a consequence of worldwide coordinated liquidity measures by central banks”
In after hours trading, the Australian SPI futures have risen slightly and are trading at 4293 points.
Asian markets had a mixed day, Japan’s Nikkei 225 is up only 0.4% at 8638 points, the volatile Hang Seng down slightly to 198961 points and the Shanghai Composite currently off over 1% or 31 points to 2355 points, still slinking at yearly lows.
The US markets overnight were mixed following the huge surges of Wednesday with the S&P500 actually closing down 0.2% to 1244 points, maintaining a position halfway through the price distribution of the October rally.
In Europe, the markets were off stronger with the UK FTSE down 0.3% to 24890 points and the German DAX down almost 1% to 6035 points after the 5% plus rallies the previous session.
Not as strong as equities, the Euro (EUR/USD) continues a very weak breakout from its double bottom, currently trading unchanged at 1.3463
Reflecting this of course, the USD Index has also stalled its correction, finding very short term (3 days) support at 78.3 points, barely off its recent highs.
The AUD slipped slightly and is currently at 102.19 cents whilst WTI crude also hovers around $100 a barrel alongside other commodities taking a breather, as the weekly chart of the CRB Index below shows a symmetrical triangle forming:
The exception is Gold which is up 0.5% or $9 an ounce during the Asian session, now at $1748 USD an ounce, likely on its way to resistance at $1800 USD per ounce. In Australian dollars however, gold was steady and is now at $1706 AUD an ounce.
Movers and Shakers
All sectors but IT were in the green today – with some new contestants winning the wheel of fortune – consumer staples up 1.9%, health care up 1.8%, alongside the usual suspects (materials/financials/energy).
Investors shrugged off the S&P downgrades of the banks – and why wouldn’t they, there was almost zero analytical coverage of these effectively government sponsored enterprises (GSE’s) in the MSM. All bid up 1 to 2%, with ANZ up 1.8%, Commonwealth (CBA) up nearly 2%, National Australia Bank (NAB) up 1.5% whilst Westpac (WBC) was the best putting on just over 2%
Notably, CBA continues on its way to resistance at $50 per share, ranging within the downtrend channel it has formed since the start of the year. Note in the chart below that the hope and optimism post the early 2008 falls which culminated in a rectangle – an equilibrium of sorts – is different to the selling pressure of the channel.
Macquarie (MQG) was steady today, although it was sold off slightly earlier, it too had no negative reaction to the downgrade, whilst healthcare standout Cochlear (COH) slipped as it approached significant resistance at $60 per share.
Its “twin” CSL rose almost 2% whilst Telstra (TLS) was bid up 0.6%, but this time on slightly stronger volume, which had been a concern.
To the resources, which make up a huge proportion of the index, with BHP Billiton (BHP) bid up only 0.8%, alongside its “twin” Rio Tinto (RIO) only up 0.6% after jumping strongly yesterday on breakaway gaps.
Gold miner Newcrest Mining (NCM) also had modest gains of 0.7% but continues to kick along in a trading range with strong support, just like the shiny metal (for now).
Fortescue (FMG) was bid up 1.25%, and rounding out the ASX8, Woodside Petroleum (WPL) was also lacklustre, up 0.4% but remains at low levels.
The big winners in the ASX20 today were Wesfarmers (WES) and Woolworths (WOW) both up over 2%, perhaps on a defensive or cyclical rotation play.
All in all, the market seems happy bidding up stocks and retaining positions over the weekend and before the announcement of the critical US unemployment figures later tonight. As one trader I follow on Twitter said today:
I think the central bank action did the trick for now…..Confidence and liquidity is back.