By Chris Becker
Another strange day in Australian stocks, which barely moved, but the rest of Asia kept the trend going. The Nikkei 225 was up over 1%, with the Yen continuning to weaken, the Hang Seng did the same, while the Shanghai Composite had a scratch day, but still up a little currently.
The Aussie (AUD/USD) as the risk proxy is slowly floating upwards but will probably make a real break tonight on the release of the US non-farm payroll unemployment numbers, as the USD itself is actually strengthening with the Euro weakening and the US Dollar Index (DXY) looking like breaking out:
This is reflected in undollar – gold (USD) which is going back to support, just above the $1700 level:
Australian Stocks
At least today wasn’t as weird as yesterday, with some real winners and losers on the board across the sectors. Materials were the best, up over 1%, while staples fell half a percent, with Wesfarmers (WES) is indicative of the sector:
On the weekly chart, BHP-Billiton (BHP) is looking better, having closed above the 200 day moving average and resistance at $34 per share:
As for the index itself, while we’ve had a trendline break – which could just be a false break – prices have not fallen below the April 2011 high at 4450 points, or the orange horizontal line on the chart below. If it does break, the downside target is the 200 day moving average at 4300 points. I have warned the Macro Investor subscribers about this potential action, and gave them some options on how to protect their portfolios from a fall of this magnitude. Read the article here for more information.
We await the NFP payroll tonight and the election on Tuesday – things are starting to move….
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.
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