By Chris Becker
Its a sea of red on Asian markets today as shorts continue to get slaughtered….well not really, at least the ASX200 is up just over 11% since its September lows, but has gone nowhere for 3 full years and down 37% from its nominal high in 2007. I’d say its a few Baby Boomer super accounts getting slaughtered…
Anyway, at least today was just a scratch, as the market fell 11 points or 0.25% to 4281 points hitting support at 4270 points intraday as I expected. 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 did roughly the same, with the Nikkei 225 flat , the Hang Seng currently down just over 1% but the mainland Chinese markets were the real movers again, with the Shanghai Comp down 1% – another bull trap?
On currency markets, the Aussie has fallen through support at 1.05, currently at 1.0463 as Euro risk markets have opened, while the Euro/USD is seeing some bids, with support at 1.2320 holding, its currently at 1.2335 against King Dollar.
The US Dollar Index itself is hitting very strong resistance at the82.55 points, as gold (USD) plunges on the London open – is this going to set the scene for tonight?
In AUD terms, it has come back to $1525AUD per ounce.
Australian Stocks
Earnings season continued today – which explains this late post – again! As you can see in the table opposite, the big sector mover was IT, with carsales.com (CRZ) up 4.8% but the best mover was a contrarian play we suggested in last week’s edition of Macro Investor – Primary Health Care (PRY), up over 10% on a good profit result. In the ASX8, it was CBA that led the way with a solid earnings report today. We’ll be covering the biggest mortgage owner in the country in next week’s edition of MI, so stay tuned.
Fortescue (FMG) had a rough day alongside Newcrest Mining (NCM) as the iron ore price continued to wither, down nearly 5%:
The market is going as I thought (hold on to your hat, this doesn’t happen as often as I like!), retracing down to around 4200, which is always a healthy sign for any rally to continue. I havent changed the lines marked on the chart below – the market is holding up and waiting, bouncing off short term support at 4270 points:
As always, watch for the overnight markets for the leads and check out other indicies/sectors and stocks for opportunities. The FX markets are pointing to something else stirring…
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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