A relatively solid night on risk markets, with Iranian tensions pushing the price of oil ever higher, gold taking bigger strides and the Dow up to its May 2008 highs. Let’s have a closer look at what happened last night in detail:
The UK FTSE finished up 21 points or 0.35% to 5937, still trying to get to the psychologically powerful 6000 point level, and well above its resistance level at 5700 points. The German DAX was off over half a percent to 6809 points technically breaking the Xmas trend line, but more likely just a pullback, as it seems to want to get to 7000 or more:
The Euro (EUR/USD) has rallied, gaining over 1 cent against the USD, to 1.337 where it is currently trading there this morning, looking to form an inverse head and shoulders bullish pattern on the daily charts. Consequently, the USD Index has slipped below 79 points, adding weight to a risk-on thesis if it drops below the 78 support zone:
The resilient AUD went back above general resistance at 1.07 where it remains in early trade this morning against the USD, also another barometer of risk – a breakout above these levels would be telling, to put it mildly.
On the other side of the Atlantic, US equity markets were better performing then their cheese and beer swilling Euro partners, with the S&P500 up 3 points or 0.2% at 1361 and the narrower Dow Jones Industrial Average up 30 points to 12969 points, washing aside the last 4 years of pain:
The tech-heavy NASDAQ Composite outperformed again, up 16 points or 0.5% to 2949 points. US 10 year T-Notes actually dropped below 2% yield last night to 1.99%, the “dangerous” asset continuing to show strength in a risky world, alongside German bonds, also below 2% (1.88% yield as of last night). For reference, Aussie 10 year yields are hovering around 4% – some risk from leadership squabbles there (most if not all foreign investors don’t give a crock who is “in charge”. Like me basically.)
To commodities, WTI crude is surging ahead, the light sweet sweet oil is now above $108USD a barrel on spot prices, rising more than $2USD a barrel overnight. This is continued bad news for US consumers with Brent crude rising in step to be above $124USD on the 3 month futures and at a record high, priced in Euros. Lucky those savvy Euros have no financial problems eh?
By the way, I pegged this as a possible trading idea awhile back, with an inverse head and shoulders bullish pattern forming on the daily charts since May 2011:
Commodity action extended to the shiny metals, with gold rising more than $10 after the Asian session, finishing at $1780USD an ounce, where it remains on the open of the Hong Kong session. I wish those cloning scientists could hurry up, plenty of trading opportunities in gold!
The bullishness move has extended to the S&P/ASX200 index with futures pointing to a 15-20 points higher open this morning, to around the 4295 points level. Can the market finally close a week above 4300 points so the squids and vampires can have a party tonight at The Bar celebrating “the new bull market”? Maybe.
Trading Day will cover the Asian market session and the “ASX8” stocks after the close in the afternoon.