ASX Shares Daily – 29th June

By Chris Becker

Right – it was end of month, end of quarter, end of financial year and all was quiet until the EU meeting this morning, which sent everything attached with “risk” up! Straight up 1% or more across the board! Huzzah – crisis over!

By the way – here’s the actual statement if you want to read it: Statement (PDF)

The ASX200 held on to most of the gains, and closed the day up 49 points or 1.2% to 4094 points, but this ebullient action still kept the local bourse below the resistance formed in recent weeks, as seen in the chart below (also marked are my medium term system short/tight signals, plus the KC Signal from 1st May that signalled a possible top):

I’ll go over the medium and longer term view in Trading Week, plus my signals and key levels. This will start publishing again, with Gabbo’s consent, on Monday mornings, after a short hiatus – haven’t we got a lot to talk about?

Other Asian equity markets had similar moves, with the Nikkei 225 up 1.5%, a new medium term trend seemingly underway? The Hang Seng was up a stonking 2.2% whilst mainland Chinese markets were less ebullient, only putting on around 1% each, with the  Shanghai Comp currently up 0.9% at 2216 points.

On currency markets, the Aussie shot up over 1 cent against the USD, and is even now accelerating past 1.017:

Meanwhilte, the Euro/USD cross is also holding on to its instantaneous gains up over 130 bips instantly to 1.2584, so by definition the US Dollar Index (DXY) has recorded a slump (the Euro makes up 57% of the index) now back below the 82 point level.

Gold saw some modest gains, jumping around $12USD an ounce, where it remains at $1567USD but the overall picture is a sideways trend,   whilst in AUD terms, gold has slumped, falling over $20 an ounce, now at $1540AUD per ounce continuining its slides backwards over the last couple of days.   

Finally, in the debt markets today,  Aussie 10 year yields jumped over 6 basis points, with the generic yield now about 3% again, at 3.03% whilst as expected, Spanish and Italian bonds have soared in price on the open!

Yields have fallend over 30 basis points each, with Italian 10 year yields at 5.86% and Spanish at 6.46% – nothing like a bit of central bank buying to support your bonds hey?

Tonight

We’ve had two reports this afternoon, ignored amidst the hoopla. German retail sales slumped in May, down 0.3%, but the big news was last months revision from positive 0.6% growth to a -0.2% contraction and an even bigger slump year on year. Hmm.

Tonight we get the Chicago PMI, and EMU M3 money supply figures.

Don’t miss the updates when my colleague Greg McKenna, who has taken over MacroBusiness Morning, will report overnight market moves and data analysis.

Til then, you can find me on Twitter here.

 

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Comments

  1. looks like a great set up for a 3q rally. europe making the the logical step towards a fiscal union (what happened to the grexit?), massive short equity positions, overbought bonds, oversold equities and commodities, massive underweight equity positions, global interest rates near zero, whimps in cash at unprecedented levels ($500 bill in cash in SMSF’s alone!), valuations, dividend yeilds and balance sheets historically cheap, althought the market still hasnt made any new lows since late last year sentiment most certainly has, markets once again priced for an economic outlook that is way worse than reality.

    • GB,

      you talk about whimps in cash but at least they are not loosing money.

      How did you do this financial year?

      • yes they arent losing money ACE but they will never make any either. the only thing coming for them is lower and lower interst rates. ive got no problem holding cash, its those that are in the accumulation phase that are sitting in 60%,80% or 100% cash 5 years into a bear market that is still 40% below its peak. these are the whimps and there are thousands of them.

        5 yrs ago when the market was 65% higher than it is now do you reckon there were overweight cash positions like what there are now? no way, after a 5 yr bull market everyone was overweight equties underweight cash at the top and now after a 5 yr bear market they are all underweight equities overweight cash at the bottom. you see this everytime.

        the market hasnt made any new lows since october, 8 months ago, its hasnt made any intra day lows since early august almost a year ago. just a few weeks ago the stock maket was at 10 month highs. as the market puts in a mojor bottom what have returns on cash done? interest rates or returns on cash have been slashed.

        how did i go this fin yr? i gave back alot of profits. how will i go this fin yr which starts monday? i reckon i will outperform a years worth of diminishing returns on cash in the first 20 mins of trading.

        • GB,

          OK I understand what you are saying but there is a case for cash to, esp in this market. Take Roger Montgomery, he’s offering a new retail fund based on a record of 6% return over the last 18 months. I mean term deposits have easily beaten that.

  2. I got the worst case anticipating the bull bollocks from a low base in Belgium, where lots of buystops got hit. Do I hold them?

    Stops moved tight. Any advice welcome (not from you GB unless its a laugh).

    I’m long everything and and want to be short…oh man.

    • My advice is get to bed earlier V!

      Though if you’re long and ahead, doesn’t seem to be a problem with lack of sleep negatively impacting judgement.

      Set stops to break even or better, and wait to see what next week holds. Often a big one-day rally does not itself mean much. More meaningful is what happens in the days following that rally. Whether there is follow through, or not. Could go either way.