ASX Shares Daily – 7th September

Advertisement

By Chris Becker

Even with the big returns in Europe and US last night, someone lit a Chinese firecracker under Asian markets today, except our own bourse missed out on most of the gains. The ASX200 was only up 0.3% or 12 points to 4326 points – I’ll take a closer look at the bottom of the post including technical analysis of the bourse itself to explain what I’m going on about…

As you can see in the table above, the Nikkei 225 had a 2% plus day, whilst Chinese markets saw the biggest bids, with the Hang Seng up 2.5% and the Shanghai Composite actually up more than 4% at one point, currently at 3.9% – but still at lows. One day does not make a reversal, but with the wind at the back of risk with the ECB firing up the electronic presses, we could be looking at a bottom here.

And therefore, the Aussie battler (AUD/USD) rose as it returned to its role as risk proxy for the world, surging over a cent today or more than 1.3% The Euro/USD after looking like breaking out last night built on those gains today and was up nearly half a cent to 1.2646. The US Dollar Index is focusing in on that 81 point key level now, just above as we go into the European session.

Advertisement

Meanwhile, gold (USD) fell below the key $1700USD per ounce level today, but in AUD terms it fell considerably as the AUD rallied, falling nearly $15 an ounce to  $1638AUD per ounce

Australian Stocks

An interesting divergence today – banks (houses) sold off, materials (holes) bid up – leading the charge was Rio Tinto (RIO) as a number of shorts were squeezed out on the China rally (yours included…meh):

Advertisement

Another big mover was of course Fortescue (FMG) which rallied hard today as iron ore prices bounced slightly – I still contend this is a dead cat bounce for FMG:

Advertisement

Here’s the daily chart of the index, showing the fairly muted gains (check out the charts in my Euro gold post earlier by comparison) where the index is staying within the medium term pattern. Remember, our market moves with the S&P500, but does so in a muted form mainly due to the AUD rising at the same time – 4400 points is on the agenda, but how long will that take? There are better opportunities elsewhere, as always. Have a good weekend!

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.

Advertisement