So here we are gain, with the local market, the S&P/ASX200 index rising nearly 1% to nearly 4300 points, so we’re nearly there:
In my weekly “Trading Week” (posted on Saturday mornings after US/Euro session closed) analysis I reiterated that the local bourse needs to snap above this resistance level before moving into a new bear market rally or even a cyclical bull market. It looks like a number of other equity markets are in those positions, whilst the Aussie is left behind. We’ll have a closer look on Saturday, for those of you interested.
Other Asian markets were actually mixed with Japan’s Nikkei 225 up 1.5% and breaking the 10,000 point barrier, as the Yen continues to fall, whilst the volatile Hang Seng is barely up at around to 21385 points. The reason? The Shanghai Composite was up in early trade but has tumbled nearly 3% in the afternoon session, on comments by Premier Wen Jiabao warning about the real estate bubble bursting. The bourse is currently down 2.5% to 2392 points, still above its breakout from its long term downtrend channel, but like the ASX200, hitting stiff resistance at its 200 DMA:
The AUD is still sitting around 1.052 against the USD and continues to look weak (Disclosure: I’m still short for a short term trade that may become a larger position):
Gold lost around $5 in the Asian session, moving to $1670USD per ounce and down $20 to $1587 per ounce (because of the lower AUD). Note, I’m also short (in USD) the shiny metal, in my short term trading system (with only a small amount of equity at risk due to the overwhelming bullish bias):
The ASX8
Regular readers will know I follow the ASX8 (the top four banks and miners) on a daily basis, as they are effectively a big proxy for the entire market – the Houses and Holes. Add Telstra (TLS) and you’ve pretty much covered the major stars (or dogs, depending on your point of view) of the market, as the ASX8 is basically the ASX50 – which follows the ASX200 extremely closely.
Today I want to look at 2 banks – ANZ and The Silver Doughnut (Macquarie – MQG)
First ANZ, which I’ve covered before and contend has the highest probability out of the big four banks of actually moving anywhere in the next millennium or so. As the weekly chart shows, its broken out of its resistance level again, and this time looks like sticking -notice the higher lows in the last few weeks:
On to Macquarie, which again I’ve covered before as a possibly trading idea (but not an investment), with the double head and shoulders formation on the weekly chart noted a while back. Its now definitely broken free of resistance at $24-25 a share, and even a recent credit rating downgrade has been shrugged off by the market. I don’t have a price target for MQG – but the $34-35 area was a previous support area broken awhile ago. My valuation is in the $17 to 19 range for rest of FY12/13, possibly moving to $25 if forecast earnings stay on target. A big if.
The Futures
The futures are looking mixed going into the European session, probably due to the Shanghai slump. US and Euro markets are pointing to flat opens, whilst the local market has lost another 10 points in the futures to 4270 or so. The market-moving data to watch tonight is UK unemployment figures – probably ticking up on the austerity measures, EMU harmonised CPI – with consensus predicting an uptick and EMU industrial production which is likely to be negative again for the month. The US current account and The Bernank having a chat round out the data.
Let’s see what happens in Market Morning tomorrow.
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