By Chris Becker
Remember to read “Trading Week“, published Saturday morning, to put these events and ideas in context.
I asked yesterday if we were seeing the start of a recovery for the local stock market and AUD and after today it seems so, with the ASX200 up 1.3% to 4108 points:
The market is closing in on short term resistance at 4120 points (the small orange line I drew on the chart yesterday), and would require a breakout from that level for a new rally to emerge from this 3 day bounce.
I noted on Twitter earlier today that a plus 2% day occurred six times in the April-October 2011 correction – all the way to the rabbit ear bottom. So take these big bullish days in context.
I still contend that the technical picture remains on a knife edge, and the market still requires a catalyst – probably around June 17-20 (Greek elections and the FOMC meeting) to sustain any uptrend – this remains a bear market.
In other Asian markets, the Nikkei 225 gained 1.2% whilst the Hang Seng put on 0.7%, whilst the Shanghai Comp is down again (also in a bear market, a forgotten fact that flummoxes the permabulls) currently down 0.7%.
On to the currency markets, the big mover was the Aussie – nearly up to parity today, at 99.62 against the USD. The Euro is looking a little stronger going into the European market session, up slightly at 1.2569 against King Dollar.
I continue to watch gold for a sustained move and again it looked like it was going to take part in the bounce on other risk markets, but alas, there has been no breakout above the 200 day moving average nor the short term downtrend:
Looking longer term on the weekly charts gold is still below the GFC trendline (which it has respected on all corrections since November 2008) but is still above its support line from the December 2011 low:
Tonight
The data flow tonight will be matched by a few announcements, with Ben Bernanke speaking in front of Congress – which should be interesting after Yellen’s very dovish speech today, whilst the BOE may announce further cuts or stimulus as well.
We also see British house prices, services PMI, with the weekly US jobless claims and consumer credit reports. Check out our Economic Calendar here for the rest of this week’s data prints.
You can find me on Twitter here.
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.