By Chris Becker
Yesterday’s Chinese firecracker only continued to shake and bake on the mainland today with most Asian markets down or at scratch levels.. The ASX200 reversed from some minor losses early in the session to barely close out the day in positive territory up 2 points to 4387 points – or 1.64% for the month but a stonking quarter – up 7.1%! I’ll take a closer look at the bottom of the post including technical analysis of the bourse.
The Nikkei 225 had a poor day on the back of bad industrial production figures, down nearly 1% with the Hang Seng eking out a little up day. The Shanghai Composite continued its bullish run, currently up 1.5% and almost up to 2100 points.
Interestingly, Aussie bonds continue to decline (whowouldathunk) and are now below 3% – the bond bears seem to be wrong again.
The Aussie battler (AUD/USD) climbed strongly today alongside the other great undollar proxy gold, up nearly 1% or 1 cent to 1.046 against the USD. The Euro/USD is doing the same, and is just above 1.29 again. The expected bounce in the US Dollar (DXY Index) looks like getting whacked as it approached the strong resistance at the 80 point key level, falling back to 79.4 points – is QE3 back?
As I said above, the undollar currency gold (USD) is having a good session as USD weakens and looks like breaking through its short term resistance level at $1770USD an ounce:
Australian Stocks
As you can see in the table above, it was materials that led the charge, more properly it was gold stocks. Funny how we are covering them this week in Macro Investor….
Anyway, heres Newcrest Mining (NCM) over the last five years – I wonder if it can catch up to the Aussie price in gold? It was up 3.2% today and looks set to make a better breakout, but as I said, we’ve found some other ones, for both trading and investing purposes in MI, so stay tuned.
Here’s the daily chart of the ASX200 where the retracement I expected to the uptrend looks like finishing for now, although I never make an Aussie call before I see what happens on Wall Street on Friday night. The paths for the bourse are still marked pretty clearly, with a bull trap above – i.e the ASX200 needs to get over 4440 – not just 4400 to have any further traction.
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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