By Chris Becker
It was the turn of the Japanese in the latest blow in the currency wars (and a stop to my/MI Yen short), with the BOJ announcing further monetary easing today. This sent most bourses up after lunch, with the ASX200 back above 4400 points again, up over 0.5% or 23 points to 4418 – I’ll take a closer look at the bottom of the post including technical analysis of the bourse.
The Nikkei 225 obviously had a boost, up over 1.2% to 9241 points, the Hang Seng following, up 1.1% – both still oscillating around their 200 day moving average, but possibly building for a breakout. The Shanghai Composite has gone nowhere today – staying at 2061 points, although it did rally earlier in the day.
The Aussie battler (AUD/USD) rallied in the afternoon on the BOJ news and is currently at 1.0465, barely above where it was this time yesterday, needing to clear 1.048 to have any further traction in the short term. The Euro/USD followed similiarly, up 40 pips or so to 1.308 as the US Dollar Index looking to turn down again after its little oversold bounce off support at 79 points recently:
Meanwhile, gold (USD) – is up slightly and still on trend, moving up in step formation – on its way to $1800? and then?
Australian Stocks
As you can see in the table above, its been a solid day across the board, with materials and IT stocks leading – particularly gold miner Newcrest (NCM) up 3%:
As for the broader index, here’s the daily chart – closing above the recent double top and now within the “jaws of doom” between 4400 and 4440….On the weekly
Its a bit clearer on the weekly chart, but this is still quite bullish – the trend is your friend and all that… (but the market is way overvalued by every metric, if anyone cares in the middle of unlimited QE!)
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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