ASX Shares Daily – 20th July

 

 

By Chris Becker

These daily updates need to be placed in context with the longer trends and drivers amidst the overall technical picture, so head to Macro Investor for a free trial. Former “Trading Week” readers will find it reborn asTechnicals“, published 8.30am each Monday morning.

Well its been one of those weeks. Of the 75 macro markets we follow and trade at Macro Investor, and nearly 50 ASX200 stocks, there were signals flying everywhere – mainly up!

Looking at my weekly table of the major markets and FX crosses, there’s been some big moves. I’ll cover them in more depth Monday morning in Technicals, but for now, let’s see what today brought across Asia.

The ASX200 had a wishy washy day, and fell slightly after yesterdays hugely bullish day, closing down 7 points or 0.2% to just below the magical 4200 point print.

It’s a red day across the board in Asia, with the Nikkei 225 falling over 1.4%,  the Hang Seng is currently flat whilst the Shanghai Comp is down 0.7% after a very weak start this morning.

On currency markets, the Aussie has been weak today after rocketing up in the last couple of days, and is currently just above 1.04 against the Yank and is coming up to resistance at the 1.05 level.

 

 

 

 

The Euro/USD cross has remained range bound even with all this bullish market action over the last couple of days, and is really struggling to get back over 1.23 against the USD, sitting just below coming into the European session.

The US Dollar Index (DXY) is seeing some rising support at the moment on the intra-day charts, but its key level remains 83 points. Are we starting to see some bullish action in the anti-dollar – gold (USD)?   Although it too appears to be slipping  sideways, now at $1585USD, there could be a small case – like other commodities that are surging – for a new bull move in gold:

In AUD terms, the picture isn’t as clear – as it continues to fall strongly, now at $1522AUD per ounce. Although I said previously that the weekly chart shows a dominant uptrend with strong support around $1530AUD per ounce, we’re slowly getting to a position where a hedged position in GOLD no longer makes sense, and a possible trendline violation to boot:

 

Just a reminder – the week isn’t over (there’s tonights session in the northern hemisphere, which is why you’ll find all Aussie traders up first thing Saturday morning!) – and we’ve had a support line break above $1500AUD an ounce before. Nevertheless, this is weak for now, without any momentum for it (and a high AUD), I’ve reduced my hedging in gold.

 

Australian Stocks

Looking to the table at the left showing all the sectors and ASX8 stocks (the top four banks – Megabank – and the top four miners – all owned by foreigners mainly….), you can see it was the material sector that held up the index today, with financials getting sold off, alongside staples.

I’d been cautious about the rapid rises in both of these sectors, as it appears people are  bidding them up to take advantage of stonking franking credits available (to be eligible for franking credits, you need to hold the stock for at least 45 days).

On my short term trading system (which I track as its non-discretionary, but no longer use since going full time at MA/MI/MB, using my longer term position system instead) all of these look well overbought, and we are seeing some traces of reversals going on, but for now – all bull!

On to the index where the ASX200 has cleared the 50 day moving average and resistance at 4140 and looks set to tackle the closely watched 200 day moving average:

Tonight

Let’s see what happens on risk markets tonight, which have opened flat or slightly down (only Spain is up) with some weak bids across the bond markets.

Don’t miss the overnight market updates by my colleague Greg McKenna, in MacroBusiness Morning on Monday.

You can also find me rambling 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.

Latest posts by Chris Becker (see all)