The S&P/ASX 200 Index closed up nearly 20 points or 0.47% to 4159 today, after a small rally in the afternoon session. The bourse is still within its short term downtrend channel as seen in the daily chart below:
The weekly trend, which clarifies the daily noise of the market, shows the downtrend from April is still intact, although there is rising support each time the index falls below 4000:
In after hours trading, the SPI futures have slipped slightly and are trading at 4148 before the European open.
Japan’s Nikkei 225 was similarly bid up nearly half a percent to 8416 points, whilst the volatile Hang Seng was also up 0.5% to 18124 points, but the Shanghai Composite continues its downtrend after breaching support earlier this week, currently down 0.2% or 5 points to 2176 points.
Europe gave the Asian markets some hope last night with hopeful bids across the bourses. The UK FTSE was up 0.6% to 5400 points, whilst the German DAX was even better, up 1% to 5730 points, oscillating around its short term support area.
The Euro (EUR/USD) went above 1.30 against the USD and is currently trading at 1.3029, as the USD Index bounced off its nearly one year high to be just above 80 points:
The US markets weren’t as good, with very weak bids, as the S&P500 closed up only 0.3% to 1215 points, attempting to get back above short term support at 1220, as the main US exchange fights with its long term moving average, with little sign of Santa:
The AUD almost came up to parity with USD, and is now at 99.70 cents, whilst WTI crude still remains well below $100 a barrel, rising ever so slightly today and is currently trading at $94.08 USD a barrel.
Gold found some bottom pickers today, rising $15 from overnight to $1586 USD an ounce but ominously still remains under its long term trendline. In Australian dollars, the shiny metal effectively was stable at $1590AUD an ounce.
Movers and Shakers
It was a fairly good day across the board, with only the IT and consumer discretionary sectors in the red, the latter because of JB Hi-Fi’s downgrade causing a 14% plus spill in its share price. If this is the reaction to the country’s best retailer what will happen when Harvey Norman (HVN) announces the same? (but likely worse)
The banks mostly found bids, ANZ up 0.7%, but still in a trading range with support at $19 per share, Commonwealth (CBA) was up 1%, but still refuses to go above $50 a share, National Australia Bank (NAB) was off slightly, down 0.2%, whilst Westpac (WBC) up the same.
The big four basically finished the weak unchanged or down (NAB and WBC) with no solid bidding able to push them up any higher.
Macquarie (MQG) was sold off nearly 1%, maybe because they bought some JBH shares before the downgrade? Whilst healthcare favourite Cochlear (COH) also finished in the red, down 1.2%, but still 20% above its recent low.
Its “twin” CSL did the reverse and was up 1.1% remaining in a solid uptrend, almost back to its pre-July high, the lacklustre AUD helping to win over investors. Telstra (TLS) was bid up again on light volume, and too remains in a good trend after being slightly overbought recently.
To the resources, BHP Billiton (BHP) had a very quiet day, only up 0.3% as commodity markets remain depressed, its “twin” Rio Tinto (RIO) did slightly better, up 0.6%
Gold miner Newcrest Mining (NCM) rebounded over 2% after yesterday’s falls, but remains on track to hit its pre-QE2 support level at $31, as seen on the weekly chart below:
Rounding out the ASX8, Fortescue (FMG) was bid up 1.5% and remains in a tight trading range, wound up like a spring, whilst Woodside Petroleum (WPL) finished the week below its March 2009 lows, but not below support at $31 per share. Resource mega bulls must be shaking their heads, with the single digit P/E and earnings forecasts on offer and have been advised not to look at the charts from their cardiac surgeons…
Defensive stocks Wesfarmers (WES) and Woolworths (WOW) again diverged, the former down nearly 1%, the latter up over 1.2%, going against the retail stock plunge brought about by JBH. Perhaps WOW could make an offer for JBH to consolidate its Dick Smith Electronics arm?
Might be an acquisition to look at over Xmas, where I’ll still be here trading away as usual and trying to teach the finer points of risk management, although in the main, its ignored! (particularly by those who can’t comprehend the difference between stock picking and timing)
Postscript: There’s an interesting take on why the US stock market looks good at the moment over at Pragmatic Capitalism. Time doesn’t allow me to go through each point, but it definitely shows we have a market in opinions and analysis underway.