By Chris Becker
The risk-off meme created by Apple’s earnings miss (moreover the poor guidance) last night stumbled in the Asian session today, withe all markets falling. The ASX200 gyrated but eventually fell into the close, showing a distinct lack of conviction coming into the weekend. The market fell nearly 1% or nearly 40 points. I’ll take a closer look at the bottom of the post including technical analysis of the bourse.
The Nikkei 225 had a similar day and remains under its resistance at 9200, the Hang Seng and Shanghai Composite also fell, with the latter still playing looking like having another bull trap:
The Aussie (AUD/USD) as the risk proxy also fell off its resistance overhead, but is still on its short term uptrend for now:
The Euro was weaker as the USD firmed up – we could be firming up for a breakout here in the US Dollar Index (DXY), which is bad for risk assets:
Gold (USD) remains weak and its short term downtrend continues in a tight channel with no sign of a reversal yet – $1630AUD is the target here:
Australian Stocks
No winners at all today across the sectors – everybody is taking profits and seeing how far this dip goes. OK, telecomm – read Telstra (TLS) was up slightly… In other stocks, we had major industrial Toll Holding (TOL) saying they were seeing “no sign of rebound in profits” for next year, while Macquarie Group (MQG) announced a smaller than expected rise in FY net profit, mainly due to lack of trading volatility (and was able to offset this by slowing reducing staff….)
In the ASX8 (the top four miners and banks), Rio Tinto (RIO) was the worst, swapping yesterday’s comparatively good performance with a drubbing. Here’s the weekly chart to show you the false break and retracement back to former resistance now support (the orange line):
It looks like the double top (a bearish reversal pattern) has come true with Woodside as well:
As for the index itself, the KC Signal (a signal I developed to try to find turning points in overbought and oversold markets) that was triggered late last week continues to work, but we are still looking for a break of the uptrend line and the April high – and it is very close. Again, watch the SP500 for a clear break – the fact that positions were liquidated before the weekend speaks volumes in my book:
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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.
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