Trading Day – 27th February

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Well that was an eventful day. The Aussie market lost almost 1 percent or 39 points down to 4267 points after breaking the 4300 point barrier on Friday for the first time since early December. There seems to be an echo in here, since we’ve been here before (late October, mid November 2011) and my core thesis – a breakout from CBA and BHP is required for the market to breakout into new highs – has not yet been satisfied.

On to other Asian markets which did a whole lot better, with Japan’s Nikkei 225 down very slightly, still building on its breakout but I did warn of it was looking a bit bubblicious in the short term. The volatile Hang Seng is currently up 0.25% to 21459 points with the Shanghai Composite up almost 1% again, now above 2460 points and continuing its breakout from its long term downtrend channel.

The AUD fell below 1.07 against the USD, almost half a percent and is currently trading at 1.067 against the US Dollar, whereas gold, after correcting during the NY session on Friday, has slipped a bit in the Asian session, currently at $1773USD per ounce or $1661AUD per ounce:

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Movers and Shakers
“I see red, I see red, I see red” across the board with all sectors down but utility stocks, the materials sector worse off (i.e BHP) as realisation that the Carbon Tax is here to stay. Until our New Overlords’s takeover at the next election…maybe

Is this uncertainty “moving” stocks? Probably not, but we all like a story to match our own biases. Observation through price action can clarify this, even if you think it’s just tea leaves – because others don’t think it’s tea leaves, it actually works…

Moving on, let’s quickly check out the ASX8 (the top four banks and miners) because I have some lawns to mow:

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ANZ lost the 0.5% it gained on Friday, where it broke out above resistance at $22 per share, its most recent highest high from October last year, still looking the strongest of the building societies:

The big brother of banks, the Commonwealth (CBA) also lost 0.5% and continues to flounder around like a flippy floppy fish, as National Australia Bank (NAB) finished flat, continuing to go sideways whilst Westpac (WBC) was down 0.3%, also still technically in a sideways funk like NAB.

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To the holes, where BHP Billiton (BHP) was the biggest loser, dragging the market down on the Gillard pyrrhic victory, down almost 2% for day and remains stuck in a trading range with a potential bottom at $34 a share. Without a big rise in the Big Australian don’t count on the broader market moving anytime yet.

Its “twin” Rio Tinto (RIO), lost 1% and took back the gains of Friday and also remains in a trading range after trying to break free of its bearish downward bias, with resistance at $70 per share and support at $59 a share.

Gold miner Newcrest Mining (NCM) continues to sell off, as the bad news around the Lihir project lingers, losing another 3% and now breaking its uptrend, having risen almost 20% since the Xmas low:

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To finish out the ASX8, Woodside Petroleum (WPL) also lost about 2% after going a bit bubblish last week, probably going to retrace a bit but still follow the oil trend? One to keep an eye on, as the junior oil plays look okay at the moment…

The futures are looking a bit mixed with the EUR/USD steady going into the opening in Europe, whilst oil and other energies take a slight breather. The data tonight overseas is light on, with M3 Money Supply stats out of Europe the only one of note, as markets digest the G20 summit outcomes in Mexico over the weekend.

Let’s see what happens in Market Morning tomorrow.

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