By Chris Becker
Remember to read “Trading Week“, published Saturday morning, to put these events and ideas in context.
Rebond de chat mort – the dead cat bounce?
Risk was back on today after the recent hammerings and following the G8 meeting, where the usual platitude of “its all good mate” was handed around, with forced smiles. With not much data to go on apart from some bland Japanese prints, equity markets in Asia were bid up, although some peripheral markets missed out.
The ASX200 was up 0.7% or 27 points to 4073 points, bouncing off support just above 4050 points on the daily chart:
On the monthly chart, the weight that the market bears (sic) – unable to get out of its secular and cyclical bear market is clearly evident, although support at 4000 points should give the permabulls something to back trucks into:
…that’s a lot of dead cat’s bouncing along there.
The Nikkei 225 finished up 0.25%, still in the doldrums, whilst the Hang Seng lost 0.22%, the Shanghai Composite had a scratch day. Only the Korean and Indian markets alongside our own had any joy today.
Onto bonds and there was a broad sell off of Aussie’s, but as I pointed out this morning, yields are at record lows anyway. Just to note – Chantwest, a superannuation performance monitor group, has said today that super funds look like clocking their third negative year in a row…..might have something to do with too much in equities, not enough in bonds????
Onto currencies – where the Aussie had a small bounce alongside other Asian currencies (except the Yen) against the USD, but the Dollar Index remains strong going into the European market.
Gold prices were bid up all session and breached $1600USD per ounce ever so briefly before being sold off into the London session, where it sits at around $1595USD per ounce. Crude oil is seeing some sharp bids as Euro-land opens as well, with both markers (ICE and WTI) up nearly 1% already.
Tonight
The data flow tonight is mainly secondary and scarce, with UK CPI and the usual weekly US retail sales (Redbook and Goldman stores – only about 15% of the market) printing. All eyes will be on the S&P 500 tonight – can it hold or will we see some more sell-offs to get the Fed back in the game with more milkie wilkies, after the mixed prints of last week, and the Greek/Euro fairytale?
Euro equity markets have opened up firmly, with only the Spanish IBEX in the red, the rest up 0.3 to 0.6%.
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