ASX Shares Daily – May 24

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By Chris Becker

Remember to read “Trading Week“, published Saturday morning, to put these events and ideas in context.

The ASX200 wanted to breakfree with jumping unicorns, but the snipers were out on the grassy knolls, the market falling 11 points or 0.3% to 4055, remaining just above short term support above 4050 points on the daily chart:

I said recently that this market, in the medium to long term at least, is not as oversold as some would say. I contended (or my hypothesis….) was for a completion of a dead cat bounce by about 4150 points or so before resuming.

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I was wrong, so very wrong. It only got up to 4120 points….The key support level to watch remains 4000 points, particularly on a weekly close, with overhead resistance at 4400 points to clear:

Again, individual investments, or at the very least hedging your exposure, count here more than following the ASX8, or dumping your entire portfolio as some have cautioned recently.

Onto other Asian markets, where its a mixed big, but mainly down on the majors. The Nikkei 225 finished flat, the Hang Seng down 0.3% the Shanghai Composite currently down 0.3% as well, no great encouragement from the flash PMI of course.

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In the currency markets, the USD remains largely unchanged throughout the session, although the Aussie is forming a possible short term/intraday bottom:

Like the ASX200, the AUD is coming to the bottom of its recent support/resistance “box” (formed from the post QE2 era) at around 96 cents. A break below would likely see a fall to 90 cents or even further:

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Gold is having another weak Asian session, down a few USD to $1588USD per ounce but was actually up in AUD terms by $3 to $1596AUD per ounce. The bugs need some strong bids in the next few weeks to stop this turning into a rout for the shiny metal. Crude oil is strengthening only slightly after last nights retracemetns, with both markers (ICE and WTI) up around 0.5% already.

Tonight

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The data flow tonight is important. We’ve already had the confirmation of first quarter German GDP – which is slowing down (to Australian levels? LoL). In the next hour or so there is a brace of flash PMI indexes to be released across Europe, both services and manufacturing, for May.

This should give an insight into how fast the European economy is slowing down, and will be followed by first quarter UK GDP print, with the market expecting a confirmation of the technical recession in the Mother Country.

Finally, some US data – the usual weekly jobless claims and then durable goods orders (consensus is expecting a slight tickup over the month), and then the  Kansas City Fed manufacturing index.

You can find my Twitter here.

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