Trading Day

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Asian markets continued the risk-on rally from overseas markets with the Australian bourse outperforming all others, the S&P/ASX 200 Index closing up 2% or 86 points to finish at 4187 points.

As I said yesterday, the last four months have seen volatility reign, with daily closing prices ranging from just below 3900 and just above 4300 points. Today’s bullish candle clearly breaks above the December downtrend, getting set for a short term rally possibly up to 4350 points, where resistance awaits:

In after hours trading, the SPI futures have slipped slightly, down just below 4180 points, following slow leads from the European and US futures.

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Rounding up the other Asian markets, Japan’s Nikkei 225 closed up 112 points or 1.3% today, the volatile Hang Seng was down 0.4% to 18805 points and the Shanghai Composite started the year in the red, currently trading down 16 points of 0.75%

The AUD stayed above 1.03, slipping a few pips and currently trading at 1.035 against the USD, whilst WTI crude also slipped slightly, now at $102.64 USD a barrel.

Gold has just crossed below $1600USD an ounce again, having a big rebound overnight, but still technically weak as I mentioned in Market Morning. In Australian dollars, the shiny metal is steady at $1543 AUD an ounce.

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Movers and Shakers
With a 2% up day, you would assume all sectors would finish in the green – and you’d be right given the ASX200’s gross concentration of Houses and Holes which are correlated extremely with other financial assets. The best performers were the usual suspects, materials and energy stocks with financials not far behind.

The banks all finished up strongly, with ANZ up 1.6% possibly moving out of its very tight trading range, Commonwealth (CBA) up 0.77% and again dicing with strong resistance above $50 per share.

Look, if the perma-bulls get real excited, a move to $52 to $55 a share for CBA is a big possibility, especially on the back of any rebound in house prices in January/February, given the Big House is coming up to paying an interim dividend in mid-February, (almost 10% annualised grossed up). The $50 line, also the average price since June 2010 is key here (weekly chart):

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National Australia Bank (NAB) surged 1.85% having a very short term and noisy rally and Westpac (WBC) was up around 1.6%, finding very strong support at $20 per share, with $21.50 the intermediate target at resistance:

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Macquarie (MQG) also had a strong day, up over 2% and is ever so slowly getting up to the $25 per share resistance level, a break of which would be extremely bullish for the Millionaire Factory (which is getting smaller every day, so more millions, less squid), whilst healthcare favourite Cochlear (COH) slipped again down 0.3%, its “twin” CSL also not moving much as attention goes all to the Houses and Holes, not the Future and Technology….

Telstra (TLS) is getting set up for a blowoff in my opinion, up 1.5% today on high volume (actually its pre-Xmas daily average) accelerating a little too fast and setting up a “KC Signal”, which means short term traders will be tightening stops (I know I am!) which could mean a fast fall:

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To the resources, where diamond encrusted unicorns excreting coking coal reined supreme: BHP Billiton (BHP) was up 4% but don’t get too excited, it is still stuck on the bottom, needing to break $37 per share for the short term, and at least $39 (preferably weekly) for any sustained price rise:

Its “twin” Rio Tinto (RIO) also shone, up nearly 3% about to break its short term trendline, with overhead resistance and a target of $70 per share, whilst gold miner Newcrest Mining (NCM) was up just over 1% still at depressed levels seeing no sign of life.

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Fortescue (FMG) came back to its average volatility, rising over 4% probably going back up to $5.10 a share in the short term, and to finish out the ASX8, Woodside Petroleum (WPL) was flat – again, and like Newcrest remains at depressed levels just above $30 per share.

Finishing up with the defensive stocks Wesfarmers (WES) and Woolworths (WOW) both seeing big bids, the former rising over 3% to return to just below its average price since September 2011 and the latter up nearly 2%, now in a medium term uptrend:

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Read “Market Morning” published at approx. 830am AEDST for an overview of overnight market action and for leads for the Asian session.

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