Markets bounced back today, responding to the good data led gains on Wall Street overnight, but locally the data flow was not as good, although the unemployment numbers failed to take the gloss off the action as the Japanese economy contracted less than expected amidst a record current account deficit (CAD) print. Markets are weird hey?
The S&P/ASX200 ending up climbing 0.7% to 4171 points. Yesterday I reminded readers that the weekly chart has support at around 4100 points where the market could create another higher weekly low in this bear market rally. If it doesn’t, off to 3800 points again:
Other Asian markets are currently stronger, possibly on rumours of a reduction in the reserve ratio for Chinese banks, with Japan’s Nikkei 225 up 1.7% to 9731 points, the volatile Hang Seng up nearly 1% to 20818 points. The Shanghai Composite is also up 1% to 2417 points, still above its breakout from its long term downtrend channel.
All eyes were on the AUD as the unemployment figures were released this morning, and the commodity proxy actually gained, just above 1.06 against the USD:
For a more detailed look at what happened, here’s one of my favourite FX traders take.
Gold had a modest Asian session, moving up slightly to around $1686USD per ounce and unchanged at $1590AUD per ounce. It still looks pretty weak, but support at its 200 day moving average around $1660 likely to bring in the gold bugs.
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.
Today I want to look at the holes again, first BHP which is bouncing off its lower support at $34:
Then RIO, which is nearly back to where it started, just above $62:
Same with NCM:
Remember, this is the only part of the economy actually firing along: begs the question why they aren’t being bid up alongside the industrials, whilst the banks continue sideways…
The Futures
The futures are looking mixed going into the important European session, with the Greek debt deal going ahead tonight. US and Euro markets probably opening up, but just a few points, whilst the local market has lost another 10 points to around 4140 points at the moment. The data tonight is Euro-centric, with the ECB and BOE making rates statements.
Let’s see what happens in Market Morning tomorrow.
Disclaimer: The content on this blog should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation, no matter how much it seems to make sense, to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The authors have no position in any company or advertiser reference unless explicitly specified. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult someone who claims to have a qualification before making any investment decisions.