By Chris Becker
Another interesting day on Asian markets again, with the ASX200 just finishing in the green, up almost 6 points to 4283 points. For students of candlesticks, you’ll get the reference in the cartoon above, and I’ll take a closer look at the bottom of the post for a full roundup including technical analysis of the bourse itself.
The rest of Asia fell, with the Nikkei 225 flat the Hang Seng down 0.3% the real action was in the mainland Chinese markets again, with the Shanghai Comp slumping over 1.5% and the others down over 2%
On currency markets, the Aussie has had a see-saw start to the week, gravitating around the 1.055 level while the Euro/USD is seeing strong resistance at 1.23 again.
Throughout this mayhem, the US Dollar Index remains the one to watch, as I noted in The Technicals this morning the medium term flag pattern for the USD remains intact, and in the short term remains above the 82.4 support level:
What is very interesting is the way gold (USD) is remaining resilient, shooting ahead above $1620USD per ounce level with the chance of a further upside breakout increasing. In AUD terms, it’s also bouncing back strongly, now up to $1538AUD per ounce in a neat uptrend.
Australian Stocks
Earnings season continued today and we had lots of interesting turnarounds (and short coverings?) with Newcrest (NCM) zooming ahead over 4% perhaps finally arresting its recent falls as gold potentially breaks out? 
We also had some other stocks break out or down, generating some juicy ideas for this week’s Trades at Macro Investor. To the index – I stated last week that “strong selling pressure with the tails above the last couple of candles” on the daily chart would mean “a retracement down to support at 4270 points would not be unusual” and that pressure continued today:
I said on Friday that a continued retracement to around 4200 was a good healthy sign for the rally to continue as it seems to have picked up a bit too much steam. As always, watch for the overnight markets for the leads and check out other indicies/sectors and stocks for opportunities. Small Ords is looking good here again for a possible long setup but is also under a lot of pressure from overhead:
These daily updates need to be placed in context with the longer trends and drivers amidst the overall technical picture, where Former “Trading Week” readers will find it reborn as “Technicals“, published 8.30am each Monday morning.
Chris Becker is an investment strategist at Macro Investor, Australia’s leading independent investment newsletter covering stocks, trades, property and fixed interest. Each week Macro Investor publishes tables on the top ten most undervalued and overvalued stocks on the ASX. A free 21-day trial is available at the site.
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