The risk on rally continued to slip on Asian markets today, as official Chinese inflation numbers showed a fall to an almost Western level of 4.1% for the year.
The dramatic fall in the price of QBE Insurance, due to a profit downgrade (a review will be posted tomorrow on MacroBusiness) only with general uncertaintly caused the S&P/ASX 200 Index to drop 6 points to 4181, after falling as low as 4167 points.
The local bourse continues to hit local resistance at 4200 points, and could retrace to its rising support line as shown on the daily chart below.
This still supports a short or medium term rally thesis, where overhead resistance then needs to clear at 4300-4350 points before a sustained bear market rally can be called as the weekly price and has not yet broken above its downtrend since April 2011:
Other Asian markets saw modest falls, with Japan’s Nikkei 225 down 0.7% or 58 points to 8389 points, the volatile Hang Seng currently flat at 19143 points whilst the Shanghai Composite has also slipped, currently down 0.3% to 2279.
The AUD slipped below 1.03 again, currently trading at 1.0296 against the USD, whilst WTI crude rallied, up 0.5% to $101.39 USD a barrel.
Gold has again put on some small gains, slowly going over ite resistance level and 200 day moving average level, currently trading at $1645USD an ounce, with the next target at overhead resistance at $1680 as seen on the daily chart below:
Movers and Shakers
Another mixed day across the sectors, with property and materials leading the way, up 1.2% and 0.4% respectively, whilst telecomms (i.e Telstra) fell 1.2% and IT fell 1.6% alongside financials.
The big four banks were all flat as pancakes – I’m getting tired of this!
All still sideways on the charts, with ANZ up 2 cents, still in a holding pattern, Commonwealth (CBA) again pushing back on strong resistance at $50 per share – closing at $49.91 a share, down 3 cents.
National Australia Bank (NAB) was down 1 cent (FFS…) and Westpac (WBC) was down 2 cents…
Moving on, and Macquarie (MQG) fell 0.3% as it too remains flat on the charts, still not joining in on the fun whilst healthcare favourite Cochlear (COH) continues its selloff, down another 1.2% to be just above $58 a share.
Its “twin” CSL was also off a little and still broadly on trend, yet weakening, whilst Telstra (TLS), fell over 1% and is now below its highest “fanline” on the chart. Maybe I was right on the blowoff after all? (remember, my short term trading calls have less than 50% success ratio)
To the resources, where BHP Billiton (BHP) was up 0.5% and is slowly heading back up to resistance at $37 a share, a breakout being very bullish for the overall index. Meanwhile, its “twin” Rio Tinto (RIO) was up nearly 1% and has broken out and formed a short term uptrend, with resistance at $70 per share its next target:
Gold miner Newcrest Mining (NCM) came off a bit, down 0.5%, looking mildly bullish as it rebounds off a bottom at $30 per share whilst the commodity itself is also pushing back up. Fortescue (FMG) was down 0.6%, probably absorbing the impact of Cyclone Heidi, unable to move any iron ore since Tuesday.
To finish out the ASX8, Woodside Petroleum (WPL) was flat, still looking to build on its short term uptrend, again, presumably feeling the pressure of Cyclone Heidi.
Finishing up with the defensive stocks Wesfarmers (WES) and Woolworths (WOW) were mixed, the former down 1% and still moving in a sideways range, the latter up 0.5%, remaining on trend and coming up to resistance at $26.30 and its long term moving average.
The major news to watch tonight are a brace of Spanish and Italian debt auctions, with up to 17 billion Euro up for sale. European and US stocks futures are both up slightly, whilst SPI futures have slipped slightly to be around 4175 point level.