By Chris Becker
There’s more than one storm going on around the world – the market was expecting the Bank of Japan to turn the liquidity taps on for a 20 trillion Yen boost but they replied with “only” 11 trillion Yen. This has sent the Yen up, the Nikkei down and had no effect on the Aussie market! As a Macro Investor subscriber said to me today – it seems the ASX200 is oblivious to everything going on around it…even mega-Storms and well, economic reality.
The ASX200 closed up 8 points or 0.2% to 4485. I’ll take a closer look at the bottom of the post including technical analysis of the bourse.
The Nikkei 225 is falling sharply after a good start to the day on the BOJ news, down 0.6% to 8867 points, falling over 1% on the announcement:
The Hang Seng off by nearly 1% and the Shanghai Composite having a scratch day after an enormous spike early in the session, with the Aussie (AUD/USD) proving very resilient in the Asian session, gaining over 20 pips and firming up in the short term.
The Euro and US Dollar Index (DXY) swapped positions again, with the latter firming up above 80 points on the daily chart – QE3 has so far been a fizzer as safety returns to King Dollar:
Gold (USD) has shown some short term support above $1700 level, but the short term downtrend remains for now and could be under even more pressure if a wider risk-off move eventuates.
For an Australian perspective on gold, check out The Bullion Baron, who has put up an informative post on gold and precious metals here.
Australian Stocks
So to Aussie stocks. Well another subdued day for obvious reasons with not many winners on the board. Commonwealth Bank (CBA) was the best with a near 1% up day, and Newcrest (NCM) fell to just above support at $26 a share.
The index remains on trend – and you know – if it can get over this stormy weather (sorry), with US markets closed with no clear direction, a Bank of Japan reluctant to hit the presses, the crucial non farm payrolls on Friday night and the Presidential election next week….then I can’t think of any other building wall of worry for it to climb over this year. Except in 2013 when the terms of trade hits home….but thats like months away man…
When I see this chart and that trendline, it reminds me of this:
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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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