By Chris Becker
Its day 2 of QEforever…No, I’m going to start counting the days, and nor should anyone count on any profits made so far in this rally. The most riskiest thing this rally faces is the rally itself…
Enough with the philosophies and opinions – what happened today? Well, the ASX200 finally broke above 4400 points and closed above that level for the first time since May this year. The market was up 12 points or 0.3% to 4402 points – I’ll take a closer look at the bottom of the post including technical analysis of the bourse.
Other Asian markets had similar mild gains, with the Nikkei 225 having a scratch day, the Hang Seng barely in positive territory, whilst the Shanghai Composite is going against the trend, down 1.5%
The Aussie battler (AUD/USD) is not pushing through overhead resistance at 1.06, currently at 1.0529 whilst the Euro/USD continues to rally, now above 1.31 as the US Dollar Index continues to fall:
Meanwhile, Queen Undollar – gold (USD) – is pausing on what is a great old run – up over $100USD an ounce since its breakout, and everyone thinks its going to $2000 or more. Usually that would be a crowded trade idea to fade, but QEinfinity would suggest its pointless to fight the tape or button marked CTRL +P
Australian Stocks
As you can see in the table above, its all about the miners – materials stocks provided almost all the gains on the local bourse, with gold miners Newcrest and BHP the main recipients. Banks are steady, as CDS prices fall and the AUD remains high, whereas the rotation out of health and consumer discretionary stocks gathers pace.
As for the index, here’s the daily chart, showing it has now closed at the previous double top high before its well-worth retracement in late August. It now faces the next test, and we have a new cyclical bull market on our hands – the previous high at 4440 points – if it breaches that we are off to 4700-4900 points, alongside the S&P500 in lockstep.
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.
You can follow Chris on Twitter.
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.