By Chris Becker
Well that was a boring day – scratch days all round, except NZ and Shanghai. The ASX200 jumped out of the gates at the open but was sold off all afternoon and barely finished in the green – up 2 points. Meh. That’s four days in a row of nothing happening… I’ll take a closer look at the bottom of the post including technical analysis of the bourse.
The Nikkei 225 had a scratch day – strangely because the Yen is weakening (against the USD at least) which should support stocks, the Hang Seng also went nowhere, while the Shanghai Composite is currently down 0.5%.
Aussie bond yields rose a bit today and toying with the 3.2% level – I’m looking at 3.4% for a re-entry point to buy Aussie bonds but the same can’t be said for the Aussie (AUD/USD). It’s also just hovering around 1.03 – but look at the series of lower highs over the last couple of months, and particularly just recently:
The Euro is having a minor uptick, whilst the US Dollar Index (DXY) has gone nowhere, mainly because of the Yen. The same can be said for gold (USD) which took on a couple of dollars today in the Asian session, but that’s it. As I said yesterday, f it doesn’t climb back above $1735 and then rally beyond $1755 within the week, it could fall as far as $1630US an ounce, taking the commodities complex with it:
Australian Stocks
I think its time to take up golf (again) because there’s not much going on with a scratch day like this. Banks were bid up slightly, as were materials – Telstra (TLS) was up 0.7% hitting resistance overhead:
As for the index itself, the KC Signal (a signal I developed to try to find turning points in overbought and oversold markets) late last week is still clanging with a four day dip currently underway, possibly retracing to the uptrend line at 4480 points. This may offer a re-entry point for the bulls, although the 13 day ADX trend indicator is now approaching very overbought conditions:
Looking a bit closer, we can see this dip has only been 4 days, with heavy selling pressure overhead, with real support a fair way off at 4480 points (notice the cluster of bars in early October):
This free daily update should be read alongside Live Trades articles, published every morning at Macro Investor, and placed in context with the longer trends and macro drivers within the overall technical picture, where Former “Trading Week” readers will find it reborn as “Technicals“, published 8.30am each Monday morning at Macro Investor.
Chris Becker is an investment strategist at Macro Investor, Australia’s leading independent investment newsletter covering stocks, trades, property and fixed interest. 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.